By Oliver Witte /
We posed that question in mid-March to a cross-section of rural builders around the country and got answers that ranged from “best ever” to “still slim.” It was clear that some parts of the country were recovering from the recent recession faster than others. Further, the demand for some building types – such as barns – was growing faster than some others.
The cheeriest report came from Tom Wolford, owner of W.C. Building in Newark, Ohio.
“2012 is shaping up to be a record year for us,” Wolford said. “We already have under contract more work than in all of last year.” That is saying something because he described last year as average.
Wolford attributed the surge to a pent-up demand that was finally overcoming difficulties in obtaining financing. Even a little garage, he said, might require three or four months to be approved, whereas before it could be handled with a credit card and a handshake. Some commercial buildings are taking as much as a year these days.
Ag buildings, especially dairy barns, commercial buildings and churches were mentioned as productive building types. Wolford works exclusively in post-frame.
Profitability should improve this year, too. Wolford said he is trying to get by using winter staffing to avoid hiring. He is still being cautious about the durability of the surge he is feeling. He sees the two major drags on the market: gas prices and regulations.
“As long as gas doesn’t get much over $4 a gallon, we should be OK,” he said. “I see the need to enforce some rules but not going overboard the other way.”
Housing, on the other hand, remains in the doldrums. He has only one house under construction.
Wolford credited his location, in central Ohio, as more fortunate than northern Ohio, where high unemployment has dampened owners’ enthusiasm for expansion. Wolford has been in the building business for 10 years.
Less blessed by geography, Bob Briskey, owner of Fingerlakes Construction in Clyde, N.Y., is waiting for business to return to normal.
“Last year was the worst for us,” he said. “It’s still slow in the East, but right now I feel optimistic.”
So there’s light at the end of the tunnel?
“Yes,” said Briskey, “but it’s a long tunnel.”
Nevertheless, small businesses in his area are starting to say the worst is over. Activity has picked up quite a bit, he said.
Briskey said most of the activity is coming in ag buildings, auto repair shops and welding shops. Turning them into contracts will take time.
In the meantime, Briskey is looking at technology to help him work more efficiently. For example, each one of his trucks is equipped with one of the new tablet computers equipped with a global positioning device. Timecards now can be filled out electronically, saving a trip to the office and avoiding trouble with New York’s rigorous laws on wages and hours. The state requires him to document to the minute how much time employees take for lunch. They must sign on or off within a mile of a job site. The tablet even records how fast the truck is being driven. Requests for additional materials are run through the tablet.
“The tablets can do so many things that I’ve been thinking of getting rid of our cell phones,” Briskey said. “We keep them only for their 911 function.”
Briskey credited Fingerlakes’ successful adaptation of tablet technology to his information technology director, Norm Payne.
Out west, Aldrich Lumber in Billings, Mont., is bucking national averages. A fixture in Billings, Mont., since 1937, in December it relocated to the edge of town where it is focusing its attention on pole barns and riding arenas.
“2011 was a good year for us,” said Greg Aldrich, the president. “We were up 20 percent, and we’ve been busy through the winter. The outlook for the rest of this year is up. We’re near the North Dakota border, so we benefit from the surge in oil-related construction. We’re backlogged, we’re advertising and we’re picking up crews. I’ll be disappointed if we don’t do at least 30 percent more business this year than last year.”
Aldrich said he expected to hit break-even for the year by Month 6.
He has had success with ag buildings, mostly dual-use structures for storage of equipment or grain. He credited much of his success to the adaptation of laminated trusses from Starwood Rafters, which he orders from Independence, Wis. They permit high sidewalls and arched interiors, and they go up quickly.
FBi Buildings in Remington, Ind., is “off to a good start” in 2012, according to Greg Lehman, director of construction. This good news comes on top of 2011, which he described as a “very good year” and “absolutely better” than 2010.
“We pulled our recovery from agriculture,” Lehman said. A tax structure that allowed farmers 100 percent depreciation created energy in the market. On top of good crop yields last year conditions look favorable for continued growth, he said.
Brent Ryan, manager of the Ixonia, Wis., office of Morton Building is still waiting for the economic recovery to reach southeastern Wisconsin. Construction, he said, tends to reflect local business conditions more than national trends. Ryan described his market as flat but consistent.
“It’s just not getting any better,” he said, noting that construction business has been flat for the last three years in his territory.
The warm winter has given a boost to Tailored Building Systems in Grand Rapids, Mich.
“Things are looking up from a year ago,” said Jim Simon, president of the company, “and not just in the ag market.”
The momentum began to pick up again the middle of last year, he said.
“We’re up at least 20 percent,” he said. “We will be rebuilding our work force.”
Repeat customers are driving most of the gains. Unseasonably warm weather allowed him to work with some continuity through the winter. Major masonry projects, for example, could proceed without tenting or protection.
Customers in central Wisconsin are interested in proceeding with their building projects but they seem to lack confidence in the economy.
“A lot of things are making people think twice before they sign,” said Jeff Meyer, president of Meyer Buildings in Dorchester, Wis. “The only positive thing I have to report – and it’s still early in the construction season – is that I’m pretty busy quoting for ag buildings. I usually wouldn’t have seen this level of activity for a few weeks” into the spring season.
Gas prices are a particular worry.
“The last time gas prices hit $4 a gallon, the economy shut down like a light switch going off,” Meyer said. “It’s also an election year and there’s a lot of unrest about where we’re at.”
Dairy prices have held up for the last six to nine months, but futures are down again.
Meyer is responding to the challenges by diversifying building types.
“When I started, we were 80 percent ag-related,” he said. “I saw this as an issue because every market has ups and downs, and we wanted to have something in our back pocket.”
He said dairy barns used to account for most of his business, but they have been declining for the past two years – perhaps due mostly to fierce local competition. Recreational buildings have been a productive market segment.
Meyer is considering expanding into pre-engineered steel buildings, especially as turnkey projects. Meyer said he just completed a robot dairy barn that automates the milking process. Four robots milk 240 cows in what he described as a top-of-the-line facility.
Barn design and construction have been evolving, Meyer said. He has been experimenting with a laminated fabric called Moisture Loc from McElroy Metal. It stops moisture condensation and dripping from non-insulated buildings. It costs about 35 cents a square foot, according to Steve Mikkelson, a sales representative for the company. RB
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