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VOL. 8 | NO. 11 | Saturday, March 7, 2015

Building Boom

General contractors say brighter days ahead

By Amos Maki

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With the greater Memphis area slower to recover from the recession and economic downturn than other parts of the country, frustrated local general contractors watched in 2012 and 2013 as firms across the country participated in what appeared to be a robust national economic rebound.

Now, with the recovery finally taking root in the Memphis region, general contractors say business is booming with a mix of public and private projects.

Saddle Creek construction 

(Memphis News/Andrew J. Breig)

“It started last year, no question about it, but this year we’re a lot busier than we were last year,” said Chris Woods of Chris Woods Construction Co. Inc. “Things are not great but they’re so much better than they were in previous years. We’re cautiously optimistic about the future.”

From Downtown to East Memphis and from Millington to DeSoto County, general contractors and their crews are busy handling everything from renovations at AutoZone Park to an overhaul of Memphis International Airport to the development of Crosstown Concourse.

In addition to new construction, investors and companies are slowly pouring more capital into properties, tackling maintenance projects – such as roof repairs or repaving – and other upgrades they may have deferred during and after the recession.

Woods, whose company is handling the ambitious, multi-phase concourse modernization plan at Memphis International, said the public and private sectors are both contributing to the recovery, which he described as deep and industry diverse.

Saddle Creek construction 

(Memphis News/Andrew J. Breig)

“It’s really broad-based,” said Woods, who recently hired three new foremen to help handle the company’s workload. “I think we’re seeing it all over.”

“It was so bad up through 2013 – it seems like forever to us – but now all the sectors are picking up,” Woods said. “The private sector is kicking in.”

Nationally, spending on private projects such as office buildings, power plants, factories and hotels climbed significantly in 2014, a potential sign of broader economic growth in 2015, according to the Department of Commerce.

“The interesting thing in Memphis is it’s across all sectors of construction,” said Rusty Linkous, president of Linkous Construction Co. “We’ve seen manufacturing and industrial opportunities come back. The office market, which was kind of flat, is also picking up so it’s across the board.”

Linkous Construction Co. is working on a renovation and expansion of The Shops at Saddle Creek, a new retail center Robert Fogelman II is developing on Poplar Avenue in East Memphis, the new Kroger on Union Avenue in Midtown and Boyle Investment Co.’s new office building in Schilling Farms, among other projects.

The solid gains helped boost job growth in the construction industry, which added nearly 3 million jobs in 2014, the most jobs added since 1999, according to the Commerce Department.

The annual unemployment rate for construction workers stood at 9.8 percent last year, down significantly from the industry's 20.6 percent annual unemployment rate in 2010, but still significantly higher than last year's national annual unemployment rate of 6.2 percent.

Construction jobs are expected to grow at an annual rate of 2.6 percent through 2022, making it one of the fastest growing industries into the next decade, according to the Bureau of Labor Statistics.

“So far, our pipeline is in great shape for this year,” said H. Montgomery Martin, founder and CEO of Montgomery Martin Contractors, which is handling the AutoZone Park renovations and the redevelopment of the Chisca Hotel Downtown, among other projects. “There’s a lot of work, a lot of projects in the planning stages in every sector. It’s an exciting time to be in Memphis and we’ve been very fortunate to be a mature company at this time and to be able bring our depth of experience to our clients.”

The effects of the recession and the loss of millions of construction jobs is still being felt today as contractors scramble to find skilled workers to keep up with the pace of building. In a recent survey of more than 900 contractors by Associated General Contractors of America, 83 percent said they were having trouble filling craft positions. The most difficult positions to fill were carpenters, roofers and equipment operators.

“A lot of those people left the industry during the downturn and they haven’t returned to the industry or they’ve left the (Memphis) area to find work,” said Linkous. “As the big jobs return, that will bring the workers back. Workers know when work is coming back to an area.”

PROPERTY SALES 56 295 6,392
MORTGAGES 26 180 4,035
BUILDING PERMITS 128 840 15,361
BANKRUPTCIES 31 153 3,270