The long anticipated recovery within the construction industry isn't happening yet, contractors here say.
No one's getting enough work, says Paul Levernier, a principal in Levernier Construction Inc., a Spokane contractor that specializes in school projects valued at more than $5 million.
Levernier says the company was especially interested in five good-sized public works jobs recently, but different contractors got each one of them.
"Any one of those companies needed all five jobs to get to capacity," he says.
Clancy Welsh, a vice president at Garco Construction Inc., of Spokane, says Garco has whittled down its backlog, and 2011 is proving to be more challenging than last year.
"There's a lot of competition for the little amount of work out there," Welsh says.
Building-permit valuations compiled by Spokane County and the cities of Spokane and Spokane Valley show overall construction here so far this year is far below last year's sluggish pace.
For the first five months of 2011, the value of permitted construction projects totaled $179.6 million, down 32.3 percent from the year-earlier period.
Last year's total was buoyed somewhat by permitted construction valued at $84.3 million for Spokane County's wastewater treatment plan currently under construction at 1004 N. Freya. Even without that project, the five-month total would have been higher than this year's permit valuations through May.
Contractors no longer are expecting permit values for all of this year to top 2010's combined total value of $523.7 million, meaning 2011 likely will mark the fifth consecutive decline in annual permit values for the combined jurisdictions since the values peaked at $939 million in 2006.
"It's not a turnaround year," says Dick Vandervert, who heads Vandervert Construction Inc., of Spokane. "Construction is pretty far down."
He says Vandervert Construction has been able to rehire some laid-off workers for current projects, including renovation and construction at the Lincoln Heights Shopping Center, where the company is erecting a $1.2 million building that will house a much-ballyhooed Trader Joe's grocery store.
Some construction workers here also are commuting to Pullman and Lewiston, where Vandervert Construction is erecting a $7 million office building and a $10 million manufacturing facility, respectively, for Pullman-based Schweitzer Engineering Laboratories Inc.
Levernier says Levernier Construction currently is in a holding pattern.
The last big jobs that company landed were a $12.8 million contract in the spring of 2009 to modernize and expand Freeman High School, south of Spokane, and a $10.4 million contract to remodel and expand the Cascade Medical Center, in Leavenworth, Wash.
He says some contractors are bidding jobs at or even below cost just to keep working, a practice that's unsustainable.
"We have yet to identify a particular project or niche where there's a healthy chance of making a profit," Levernier says. "If the economy gets better, we'll participate, but we're not going to participate in a knife fight."
Most commercial contractors are struggling with layoffs, working at reduced rates, and looking to other markets, Levernier says. Some companies are bidding for projects that aren't in their normal areas of expertise, such as wastewater treatment plants, fiber-optics installations, and bridge construction, he says.
"We're not doing that," Levernier says. "Contractors in those sectors are starving, and they know how to do that. We're not looking at making wholesale changes in what we do."
Welsh says Garco has landed a few sizable jobs that are keeping its core work force busy. For instance, the company is the general contractor and construction manager for the Ferris High School reconstruction and partial renovation project. The construction cost for that project is estimated at $55 million. Including equipment, furnishing, and other costs, the total project is valued at $90 million.
Even so, Welsh says, "It's still a very challenging market out there, and the volume is down considerably from last year."
He notes that it seems that every year, economic forecasters are moving their projections for widespread recovery in the construction industry out another year.
"I've quit looking for a light at the end of the tunnel," Welsh says. "We're taking care of the near future, and the rest will have to play itself out."
Vandervert says one of Vandervert Construction's strengths is in developing projects like Trader Joe's building that its affiliates, such as Vandervert Developments LLC, can then lease out.
"We're pretty well diversified with what we have," he says.
Vandervert Developments' holdings include retail, office, theater, hotel, and restaurant space.
"That's a huge advantage for us," he says. "If we didn't have that, we would be in a world of hurt."
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