A Looming Boom

FROM HOME INSPECTORS TO ELECTRICIANS TO RESIDENTIAL BUILDERS and the region's largest contractors, a powerful sense of optimism at long last runs through the construction sector. Are we back?

 

It hasn’t grabbed the big headlines one might imagine, given where the real-estate markets have been over the past half-decade. But something big is going on in the Kansas City area, and Russell Capps is living it. The owner of a home-inspection service called A Buyer’s Choice, Capps is looking ahead to early 2014, when he hopes to add staff to deal with a sharp uptick in inspections—precursors to sales.

“I was turning down five to seven inspections a week,” Capps said of his decision to expand. “I just had no more capacity, and was already at 12- and 14-hour days.” Shifts like that can be a grind, but in his line of work, “It’s a good problem to have,” he concedes.

And he’s got plenty of company. At a recent American Society of Home Inspectors regional conference, he said, “some of the guys there said they’ve been doing this for 10 to 20 years, and this is their best year in years.”

Pat Ryan, who for a decade ran a one-man shop as a residential electrician, has brought on three employees following an increase in business. While he relies primarily on projects in existing homes, some of the increased in requests to add more capacity to those older systems is linked to people preparing to sell their homes and, likely, to trade up. “When the existing homes are being moved,” he said, “that helps our company.”

And it helps Pat Ryan. A career air-traffic controller for 30 years, he’s expanding his sideline company with a plan on turning it over to the real pros. “I was doing the work of three people,” Ryan said. His new staff is laying the groundwork for expansion in 2014, when they’ll hire the hands-on electricians who he says “will do the work, take the load off and let us accomplish what we want to as a company.”

Like others tied to the realty sector, they are in boats—albeit small ones—being lifted by a rising tide. And the tide is not limited to residential real estate. The statistics bear out that area general contractors, along with architects, designers, sub-contractors and professionals in the trades, have made it through more months of belt-tightening than they’d ever imagined. But for those who’ve survived, it’s time to start ratcheting things back up.

Taken as a whole, the statistics are “an absolute indication that hiring is imminent,” says Don Greenwell, president of the Builders Association. “Our apprentice programs have all reopened in the basic trades—ironworkers who have a lot of work in the industrial sector have gone from two years of no first-year apprentices to over 120 first-year apprentices right now.”

Commercial Construction

Before the bottom fell out of the general contracting world in 2008, the 25 biggest contractors in the Kansas City region billed $2.1 billion in work for the year. They saw that collective figure plunge by more than one-third—and laid off employees at nearly the same rates—by the depths of the downturn in 2010. But that spending rose by more than $200 million in the region in 2012, and is on track to beat that number not just this year, but through 2017, industry professionals say.

As that new work arrives, it will be tackled by a dramatically different work force. “As volume dropped by 40 percent in commercial building, the most productive people were kept on the payroll,” Greenwell said. “They tended to be the most experienced; the younger and less-experienced are the ones who lost their jobs.” A national work force of 8 million fell to about 6 million, but even while an uptick in work helped drive the loss percentagees back into single digits, he said, the revival was not alone responsible. “It’s not because a lot came back to work; it’s because they don’t consider themselves to be in the construction industry any more.”

Still, Greenwell is able to tick off a list of large projects that are helping sustain employment: A combined $1.6 billion in upgrades to the Ford and Chevrolet plants here, the LaCygne power plant, the Mars candy factory in Topeka, and the central plant for the National Bio- and Agro-Defense Facility in Manhattan. With all of that, he says, “the unemployment picture is much better in Kansas City” than it otherwise might have been.