Southeast Industry Outlook
...expecting some type of upturn. Of those, 24% predict a slight increase in business, and only 3% see a significantly increasing market.
By state, the results varied. For Florida and South Carolina, “increasing slightly” was the choice that received the highest number of votes, of all choices, by respondents located in those states. Florida respondents were slightly less positive, with 31% choosing “increasing slightly,” while 36% of those in South Carolina voted similarly.
In Georgia, the selection receiving the greatest number of votes was “steady with last year,” which was the choice of 33% of respondents.
Meanwhile, North Carolina respondents were decidedly more glum, as a full 56% chose “declining slightly.”
Ups and Downs for 2010 Lou Cantu, director of business development for specialty-contracting firm Comprehensive Energy Services in Longwood, Fla., also sees the coming year as similar to 2009.
“2010 appears to have the same profile as the last six months of 2009—very tight on commercial mechanical construction opportunities with intense margin pressures on each bid,” he says. Cantu adds that he expects to see a “slight increase in bid opportunities for projects in the public sector (such as higher education and federal work), but again very intense margin pressures.”
Citing his understanding of activity among architects and engineering firms CES deals with, Cantu anticipates “a continued decline or flat line in construction activities over the next six to 18 months in Central Florida.”
Not everyone agrees with McGraw-Hill Construction’s prognostication for Florida, especially its forecast for a residential rebound.
“Florida will remain slow for at least another 18 months,” says Bob Burleson, executive director of the Florida Transportation Builders Association in Tallahassee. “And I don’t see a housing rebound in 2010 in Florida. We have a huge unsold inventory.”
Adds Tony Patel, partner with Newport Design Group in Alpharetta, Ga.: “We forecast 2010 as being a slow year for new developments. Many of our clients have told us the unavailability of credit is impacting their growth decisions for the next few years. The trend seems to be to focus on refinancing five-year loans that are coming due.”
At the same time, some subcontractors see some reason for optimism. In Georgia, Nader Brian Jarun, business development manager with American Pan & Engineering Co. in Palmetto, Ga., put it succinctly.
“We see 2010 with a slight increase from last year,” he says.
Bill Caldwell, with Waldrop Mechanical Services in Spartanburg, S.C., was another subcontractor trying to accentuate the positive.
“2010 will bring an increase in project opportunities in the K-12 education market in South Carolina,” he says. “With that increase will come significantly more competition from out-of-state contractors who have had limited participation in this market in the past. Health-care opportunities will remain steady as well.”
And the stimulus will continue to provide a boost in 2010.
“(The stimulus) is going to start to make a difference in 2010,” Cochrane says. “It’s just beginning to get some traction.”
Overall, though, for many Southeast firms at least, 2010 will not be pretty.
“It’ll be hand-to-hand combat,” Cochrane says. “The strong will survive. If we can get through 2010, 2011’s going to be better. But ‘better’ is a matter of degree.”