Tom Whittaker, left, and Don Greenwell served as co-chairmen of the assembly, steering the two-hour discussion through a wide range of issues. Among the topics explored were impacts of the construction downturn on engineering and architectural services as well as the construction work force itself. Panelists also assessed the role of technology, trends in materials costs and availability of capital for construction projects.

How Broad a Recovery?

Host Don Greenwell of The Builders’ Association and his assembly co-chairman, J.E. Dunn’s Tom Whittaker, teed up the conversation by asking each of the participants to assess both the timing and breadth of a recovery, given their various construction perspectives.

“I think from a time standpoint, it’s now,” said Dirk Schafer, chief operating officer for Dunn. “We saw a little uptick in revenue last year, and that did change the shape of the curve. This year we’re seeing another increase in revenue.” But as for the breadth, he said, “I’m not quite so sure of, or at least the sustainability. I think next year, for us, is still too early to call. I don’t know if we’re going to have a third yearly increase in revenue or if it’s going to stay flat. Three months ago, I might have said next year is going down. There are some positive signs; we still have the question on sustainability.”

Paul Neidlein, a vice president for national giant Turner Construction and general manager of its Kansas City office, said his perspective was slanted a bit by a long run of activity that didn’t start declining until this year. “For us, the next six to nine months feel a little bare. The work we’re pursing today, and over the next 90 days, doesn’t start until next year. There seems to be a lot more activity with more sizeable things that will change the curve for us.”

Fierce competition, Neidlein said, had compelled Turner to cast the net for new work far wider than in previous years, a development familiar to nearly everyone in the room, with one exception—Rory O’Connor. He’s the odd man out in any construction crowd, he says, because Grand Construction, where he’s president, just launched this year. “We’re in a very fortunate position,” he said, “we started the company with a little bit of backlog to keep us going. We’re a construction management sort of firm for owners—the way we sit right now, we have about two years’ worth of backlog. With everything else, that’s only going to last so long.” The easiest way to get work, he noted, is to have work, but “we’re out chasing everything we can chase.”

Rosie Privitera Biondo, chief executive at Mark One Electric, went against the grain by noting that as both subcontractor and specialist, “business for us has been really great for the last several years, so we really didn’t ride that roller coaster. This is the first year we’re really seeing any piece of that. I say that, yet we’re still super busy, it’s just a different kind of work. We’re going after more inside work, less outside work. Our numbers are still strong; we’re just trying to skin the cat another way.”

From the perspective of a surety operation, the Lockton Companies’ Doug Irvin noted that “just in our local activity, just watching the bid-bond activity and our premium writings, we saw a pretty sharp drop-off the last part of last year. We’re actually seeing some uptick that’s getting us back up to sustainability.” But it will be a while, he said, perhaps another 18 months. In the meantime, “no-body is really even close to being full in terms of backlogs, so there’s going to continue to be a lot of pressure on margins.”

Those in health-care construction or other niche areas will manage, he said but those specializing in retail construction are likely to struggle.