Staff Writer
The economy is supposedly undergoing a recovery, but Will McKnight hasn't seen it.
Jim Blaylock/Staff
Myron Fowler, a Keystone Homes supervisor, stands in front of one of the homes the company is building in Chamblin Ridge in Grovetown. Keystone is having a good year so far, according to CEO Lamar Crowell.
Jim Blaylock/Staff
Freddie Patio works on the air-conditioning system in a home under construction in Chamblin Ridge.
Jim Blaylock/Staff
Myron Fowler oversees a project. When the homebuyer tax credit ended, Keystone Homes began providing more value-oriented homes.
The owner of McKnight Construction Co. said his business is operating at half volume. "If you talk to architects and engineers ... there's just not that much in the pipeline for work coming up," McKnight said. "The only thing out there is government stuff."
The recession technically ended a year ago, but the construction industry is still struggling during the economic recovery.
"For construction, it still hasn't shown up," said Ken Simonson, the chief economist for the Associated General Contractors of America.
McKnight now has only 75 employees, half the workers he had before the recession started. He has only one local job lined up, and he's been sending his workers to jobs throughout the Southeast to bring in income. He doesn't expect business to pick up for at least two years.
"I think that 2011 will be worse than 2010 for me," McKnight said.
The weak demand for office and retail space, state and local revenue problems, and tight credit conditions continue to contribute to the industry's decline, Simonson said.
In July, total construction spending dropped to a 10-year low of $805 billion nationwide, as investments in construction projects are now 34 percent below their peak in February 2006, he said.
"While the stimulus is funding some vital infrastructure projects, the private sector is too cautious and state and local governments are too cash-strapped to help. As a result, overall construction spending is at its lowest level in a decade and hundreds of thousands of construction workers are unemployed," Simonson said in a release.
Nationally, construction employment has continued to drop, though other types of employment have been rising most months this year. Construction employment started falling about one year before the rest of the economy began to lose jobs. The industry's employment peak occurred in August 2006, he said.
"Since then, the industry has lost more than 20 percent of its work force; 2.1 million jobs have disappeared in construction," he said.
In August, the industry reached a 17 percent unemployment rate. During the past year, 274,000 construction workers have lost jobs.
Based on data from the Bureau of Labor Statistics that combine the construction, mining and logging industries, the Augusta metro area had a 3 percent drop in employment from July 2009 to July 2010. The area fared better than Atlanta, down 6 percent, and Savannah, which had a 4 percent drop.
In Georgia, construction employment fell 7 percent, he said.
"We're definitely still struggling," said Cyndi Brush, the owner of Brush & Associates LLC. "We've had to cut our staff, prices on houses, building expenses. We've had to cut everything. Just trying to stay alive."
She and her husband, Art Barrera, have slashed housing prices by $35,000 to $40,000 to unload the inventory. Brush doesn't think the industry will improve until changes are made on the government level.
Keystone Homes is having a strong year so far, but CEO Lamar Crowell said he is "nervous to say anything about recovery."
When the homebuyer tax credit ended, home sales "went into a steep decline." The company started providing more value-oriented homes, he said.
Pierwood Construction Co. is still operating at reduced staffing levels and is reluctant to bring in new employees, president Ken Richards said.
"We're very fortunate to be where we are compared to other parts of the country, but it's just been a roller coaster ride for probably the last two years. It's very up-and-down," Richards said.
Local builders have to compete with Atlanta-area companies, who are in the area seeking work because their market has gotten so bad, Richards said.
There are some signs of hope, however, such as new jobs coming to Plant Vogtle.
"It's just a matter of when those different things are going to start coming together and people are going to start buying houses," Richards said.
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