What
is the overall outlook for the construction industry in
the Delta for 2003? It all depends on whom you talk to,
or perhaps more precisely, what segment of the industry
they are focused on. In talking with a cross-section of
industry representatives, the same concerns continue to
crop up—lingering uncertainty about the general
economy, the stability of Wall Street, tort reform issues,
and now the list must include new and equally troubling
factors—drastically increased fuel prices and the
looming conflict in the Middle East. All of these contribute
to a general hesitancy to express optimism about the months
ahead, mirroring the frequent comments about investor
hesitancy to commit to building projects.
And
yet, some optimism does creep through. A number of firms
report good workloads; some contractors, especially those
in more specialized segments or focused on smaller projects,
are projecting a better-than-average year. Even many of
those who express the most caution see signs that economic
recovery could begin later this year, and speak of the
pent-up demand that could then bring significant amounts
of work to the Delta.
“We
noted a significant weakness during the last two quarters
of 2002,” says Buddy Edens of the Mississippi Associated
Builders and Contractors. “There are some indications
of a very slow recovery, but we really don’t see
that beginning until late in the second quarter.
“Many
people don’t want to invest in projects until there
are real signs of a recovery,” he comments. “This
is certainly true in the commercial and industrial sector—people
are waiting for things to hit bottom and turn around.
And of course, the threat of war has contributed to hesitancy
in the marketplace.
“The
tort reform issue has also been part of the battle,”
he continues. “While the recent legislative efforts
have somewhat advanced the goals, there’s still
a long way to go.”
At
Associated General Contractors of Mississippi, Perry Nations
says that the year overall is likely to see less work,
with most of the projects in the institutional, educational
and medical sectors.
He
comments, “Interest rates couldn’t be any
better, but there is a definite reluctance to invest in
spec projects and tie up money, until there are clear
signs of where the economy is going and what will happen
in the Middle East. Nissan suppliers are still booming,
but most of that work is already underway. And the state
looks to have considerably less bonded work than in the
past.
“There’s
still a staffing problem affecting state projects,”
he adds. “A very small group of people is struggling
just to oversee the work that’s already out there.”
Nations
says there are major needs in the Delta for educational
and medical facilities. “The area needs quality
health care; people don’t realize that a health
care crisis could happen quickly. The recent tort reform
efforts are a good start, but still not enough.
“Hopefully,
two new bills which are currently under consideration
will help ease the medical malpractice insurance crisis.
Then I believe we’ll see medical facilities expand
and flourish.”
“We
need to get the war behind us, and improve consumer confidence,”
says Chip Crane of F. L. Crane and Sons. “There
is a lot of work out there which hasn’t been released
due to the owners’ hesitancy. I feel a big key to
turning things around is optimism—the media needs
to project a more positive attitude, for one thing. Then
I think we’ll see confidence come back.
“The
Delta has been slow in recent years,” he continues,”
but the area’s large contractors seem to be optimistic
about the second half of the year. We’re fortunate
to have a good backlog right now to keep us busy and get
to that point.”
Among
Crane projects are Staplecotn in Greenwood, the Bolivar
County Hospital, school projects in Yazoo City, and Tallahatchie
Power in Batesville.
Expressing
a different philosophy, David Marsh says, “We just
try to put aside concerns about the economy, etc. and
move ahead.” His firm, Benchmark Construction Corporation
in Jackson, works primarily in the commercial sector;
including numerous school, church, municipal, and bank
projects.
Benchmark
recently completed expansion projects at the Washington
School and the Mid-Delta Regional Airport in Greenville.
Other projects include work at the Delta Regional Medical
Center, First Baptist Church in Greenville, and a number
of school projects.
“The
school districts continue to grow and expand,” Marsh
says. “And a number of auto dealerships are expanding.
Another positive indicator I see is that a lot of architectural
firms are busy.
“We
enjoy our work in the Delta,” he continues. “We’ve
had good experiences with the local sub-contractors, and
have had strong partnerships with them. It makes our job
easier.”
At
Robinson Electric in Cleveland, David Robinson reports
a good amount of current and ongoing work, and looks for
a good year in 2003. “The house wiring sector is
busy, and service is busy,” he says. “We’ve
got projects all around the Delta.”
Robinson
adds, however, that state work is slow at present, due
in part to the state’s financial condition, but
says that the forecast is for an upward trend. “I
hope that the state and the private sector will spend
a little money and get things moving,” he comments.
Asked
about the effects of a war in the Middle East, he echoes
a common opinion that a short-term conflict might actually
help the economy, while a long-term situation would negatively
impact economic recovery.
Among
Robinson Electric projects are the MDOT Welcome Center
project in Coahoma County, the Staplecotn renovation and
Milwaukee Tools expansion in Greenwood, and work in Greenville
for a third-tier Nissan supplier, Brown & Company.
At
Eley Engineering, which is primarily active in infrastructure
work, Bob Eley expects 2003 to be a normal, or slightly
better year, but adds that their long-range projections
are not as positive.
“We
don’t have as many projects in house for 2004 as
we’d like to see at this point in the year,”
he explains. “We’re basically finishing up
our 2003 projects, and we’re looking for new opportunities
in a flat construction market.”
Eley
points out that much of the firm’s work is in municipal
projects, funded by governmental sources, and tight money
conditions exist in that segment. While a lot of tentative
plans are on the table, he says, many are on hold due
to market, economic, and world uncertainties.
“There
is a lot of built-up potential, and with some really positive
signs, I believe the industry would move forward,”
he comments.
Recent
Eley projects include water system improvements in Ruleville,
water and sewer improvements in Rosedale, Mound Bayou,
and Shelby, and storm drainage work in Shaw.
Singleton
Architects in Jackson is staying busy, says Larry Singleton,
who reports several projects in several different stages.
“It looks to be a better year, just as 2002 was
better than 2001 for us,” he says.
A
number of the firm’s current jobs are student/recreational
center projects, church family life facilities and wellness
centers. Singleton says there is a growth trend in these
sectors, both in initial facilities and in upgrades to
existing facilities. Recent company projects in the Delta
have included the Natatorium at Delta State University
and the family life center at Cleveland’s United
Baptist Church.
“People
are more focused on fitness and wellness,” he comments.
“However, as regards churches, it seems to me that
the focus is more on the young people and their needs,
rather than fitness, etc.”
An
industry segment which seems to be flourishing is pre-engineered
metal buildings, which are seeing increasing applications
around the Delta. “Our business hasn’t slowed
down any. Smaller business projects are still strong,”
reports Raymond Huerta of Huerta Construction in Cleveland.
“Retail is also still pretty good. We’ve been
working on shopping centers in Clarksdale and Greenwood,
and recently completed one in Cleveland.” One of
the firm’s major current projects is a pet-food
processing plant for America’s Catch.
Huerta
adds that restoration of older buildings is becoming increasingly
popular in Delta towns. There is also a considerable amount
of expansion of existing buildings, he says, and reports
that his firm has worked on church expansions in Cleveland
and other Delta communities.
Also
specializing in pre-engineered metal buildings is David
Smith Construction in Inverness. Brady Smith says their
outlook for 2003 is excellent.
“Last
year was slow; it didn’t get off to a good start,”
he comments. “But things picked up later in the
year, with a lot of projects coming through late in the
year. The momentum has continued into 2003, with a lot
of negotiated projects, and we’re getting our share.”
Low
interest rates and a basic need in the area for new business
are factors Smith cites as reasons for the increased work.
Recent
company projects include the Knightline motorcycle manufacturing
plant in Merigold, Victory Temple Baptist Church in Greenville,
a performing arts center in Greenwood, and Economy Drug
Store in Clarksdale. In its own hometown of Inverness,
the company is working at the site of an experimental
AIDS-patient hospice care facility.
At
the Delta’s northern edge, Kerry Roby with Memphis
architectural firm Pickering, Inc. reports continued strong
activity, with both residential and commercial development
maintaining high levels in Desoto County.
“The
county is about to build its first sewage treatment plant,”
he reports, “Which will open a lot of new areas
for development. In the next year or two, we’ll
design a planned second treatment plant in the western
part of the county.
“There
are strong road building projects in DeSoto as well, in
advance of need. The Horn Lake community, which has some
clear infrastructure needs, is also working on numerous
development plans.”
Askew
Nixon Ferguson is another Memphis architectural firm which
has benefited from the boom in DeSoto County—one
of their major projects, Christ The King Catholic Church,
is slated for completion this fall. Joe Wieronski says,
“Things are a little slow, but there are signs they
will get better. We’re seeing a lot of small projects,
but people are waiting on some of the bigger ones, due
to uncertainties about the economy and the Iraq situation.
But after all the uncertainty goes away, there’s
a pent-up demand which should trigger a lot of work.”
Wieronski
also comments on an increase in construction of family
life centers, resulting in part from the aging of the
baby boomer generation. “They’re more involved
in church life, and fitness is important to them.”
Certainly,
there is a lot of potential for the construction industry
throughout the Delta. Once the country moves beyond a
very troublesome time, and pent-up demand is released,
the area as a whole could experience the construction
boom which scattered pockets of high activity seem to
promise. Industry leaders can only hope that the “wait
and see” period is a short one. DBJ
