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Sunday, Aug. 23, 1998
Construction Outlook
It's clear to observers that new building activity is slowing down -- or speeding up
By GLASTON FORD
Staff WriterThe pace of new construction in the Coastal Bend appears to be slowing from the heady times of 1996 and 1997, according to two key economic indicators.
But those in the local construction industry say they still are struggling to find enough workers, possibly because workers are being lured to other parts of the state where big construction projects continue to mount.
Construction employment in Nueces and San Patricio counties has dropped to pre-1996 levels, while statewide construction employment continues to climb.
Perhaps the key indicator of what's ahead -- new construction permits -- shows that Corpus Christi is lagging behind last year's pace by about 2.2 percent.
New construction permits in Corpus Christi are down from $156.9 million for the first seven months of 1997 to $153.5 million for the same period in 1998, according to city records.
Another indicator, construction employment in the Corpus Christi metropolitan statistical area, which includes Nueces and San Patricio counties, also is lower. Employment averaged 11,200 jobs for the first six months of 1998, down 5.9 percent from a monthly average of 11,900 jobs in 1997, according to the Texas Workforce Commission.
This year's monthly average is down 10.4 percent from 1996's monthly average of 12,500.
But the numbers don't tell the whole story, said Ken Hayes, executive director of the Associated Builders and Contractors-Coastal Bend Chapter.
Hayes says that while statistics may show declines in the city of Corpus Christi, the growing number of upcoming projects in his group's plan room, where contractors review plans to prepare bids, convinces him that construction in the region overall is on the upswing.
For example, city permits don't reflect activity at the Navy bases, the Port of Corpus Christi (much of which is not in the city limits), or in outlying communities such as Kingsville, Alice or Rockport, all of which provide work for local contractors and tradesman, he said.
``I think it will end up being the best year we have ever had,'' Hayes said.
Meanwhile, plenty of projects that are in the pipeline or already permitted will keep the industry busy for several months, construction officials say.
A sampling of large projects planned or recently under way includes new hospitals in Alice; expansions and new buildings at Flour Bluff and Tuloso-Midway independent school districts, Del Mar College and Texas A&M University campuses in Kingsville and Corpus Christi; and the federal courthouse in Corpus Christi.
Other projects include townhomes in Rockport, townhomes on Padre Island, a cogeneration plant near Ingleside, medical office buildings and a new 16-screen movie theater.
``I don't think (the boom) is over,'' said Gail Hoffman, executive director of Associated General Contractors-South Texas Chapter. ``It may be leveling. We may not be bursting at the seams. It is reaching a comfort level where everyone can keep up with the work output that is being created,'' she said.
The demand for workers has some local contractors advertising for workers in newspapers in other cities, Hoffman said. And the same thing is happening in reverse with Houston companies enticing Corpus Christi workers with higher wages, she said.
Statewide construction employment has climbed steadily since February 1994, and, unlike in the Coastal Bend, has not dropped off. Statewide employment in the construction industries in June was 442,000, after hitting milestones of 400,000 jobs in August 1996 and 430,000 jobs in December 1997.
In the long run, construction is not a driver of the economy, but an indication of other economic activity, said Don Hoyte, a regional economist with the State Comptroller's Office. ``It is more a reactive sector (of the economy),'' he said. ``It depends on what goes on elsewhere.''
In the short run, a large construction project that will continue for some time can employ a lot of workers, he said.
Also, capital investments, like construction projects, often indicate confidence in the future growth of the economy, Hoyte said. Sometimes other factors, like low interest rates, can drive particular projects, he said.
Most of the large projects on tap for the next 12 months or so are public projects, such as Texas A&M University-Corpus Christi's new $12 million classroom building and Nueces County's new $5.8 million long-term regional juvenile detention facility, according to an informal survey by the Caller-Times.
Public projects, while providing short-term construction jobs, don't necessarily reflect a positive economic outlook, Hoyte said.
Also, public-sector work does not provide commercial loan business for local banks, said Charles White, president of International Bank of Commerce.
From a banking perspective, the private construction work is better for business, but the other stimulates the economy too, he said. The growth at Texas A&M-Corpus Christi, for example, has a positive effect on the overall economy, he said.
The industry remains healthy, said Joe Fulton, president of Fulton Construction and chairman of the Greater Corpus Christi Business Alliance.
A recent Sunday Caller-Times had about 25 construction-related help-wanted ads, an exceptionally high number, Fulton said. There was even a classified ad for painters, something Fulton, who has been building in Corpus Christi for more than 30 years, said he had not seen before.
Some in the industry believe the reduced number of construction jobs may be related to out-of-town contractors attracting local workers to their markets.
There is work available, Hayes said. But some of the workers have gone to Houston and other areas for higher wage rates, an extra $3 an hour or more in some cases, he said.
And the construction industry lost skilled laborers, such as welders, pipe fitters and electricians, to the oil and gas industry when drilling activity picked up in 1996 and 1997, he said.
The amount of construction under way bodes well for the area economy, said Moustafa Abdelsamad, dean of the college of business at Texas A&M University-Corpus Christi.
He said every dollar spent on construction has a greater economic effect than dollars spent on direct consumption -- groceries, for example. Construction employs contractors and subcontractors, and provides business for supply companies, Abdelsamad said. Even when the contractors are from out of town, they stay here and eat here, he said.
The construction industry is always more than just the number of construction workers employed at any given time, said Gary Bushell, president and chief executive officer of the Greater Corpus Christi Business Alliance. There is a ripple effect. Buildings, be they home or office, have to be furnished.
And private construction adds assets to the tax base, he said.
Expanded government services, and the infrastructure to go with them, are often a response to growth in the private sector, said Abdelsamad.
Private construction diversifies the area's economic base, he said, adding, . ``but anyone who is building something must be filling a demand of some kind.''
Public or private, the work level looks strong for the next year, those in the industry say. In addition to the projects mentioned above, many businesses including car dealerships and restaurants are contemplating expansions, renovations or new locations, say those in the industry.
Most of the architects are still busy, said Sam Beecroft, president of B.E. Beecroft Company Inc., a general contracting firm. ``Of course that's a good sign for us. It means they are cranking out projects that we will be able to bid on in the coming weeks.''Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web