11/03/09 — Contractors give stimulus building projects mixed reviews

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Contractors give stimulus building projects mixed reviews

By Catharin Shepard
Published in News on November 3, 2009 12:57 PM

Billions of dollars in federal stimulus funding have poured into local governments, non-profit agencies and other entities over the past year, but the American Reinvestment and Recovery Act's impact on local contractors and construction companies has been mixed.

Business has been good this year for Jimmy Swinson of J & S Roofing and Construction, but it's not due to stimulus funds, he said.

"For us, it's been a good year, the best year I've ever had, but it's due to being here, doing good work and having good relations," Swinson said.

The money coming into the market has not affected the materials prices he has seen.

For Cox-Edwards Co. of Goldsboro, a company that has worked on several stimulus-funded projects in recent weeks, there are a few drawbacks and increased costs that came along with the additional work.

"The 'buy American' requirement has raised prices a bit," company official Scott Edwards said.

Projects funded by stimulus money are required to use American-made materials, which tend to be a little more expensive than other materials, Edwards said. It has not been a tremendous increase or burden on his business so far, but the cost of each project would depend on the size of the structure and the amount of materials required for it.

"It's been plus and minus. We've got three jobs that are stimulus jobs, but it's increased our paperwork," Edwards said.

The company recently concluded work on well houses in the Belfast area and two sanitary district projects that were funded by stimulus money.

Although stimulus-funded projects are a boost for some contractors, for residential builders like Bobby Stone of Stone Construction, the market -- and the company's profits -- are still down.

"We're down probably 15 percent in sales," Stone said.

His company has not worked on any stimulus-related projects, but he has noticed certain trends in costs associated with the residential construction business.

"Materials are down a little bit, labor is down a little bit and of course home prices are down," Stone said.

Billy Godwin of Billy Godwin Construction, a contracting company that handles both residential and commercial construction, also reported that materials prices are coming down slightly.

"You can bargain and reason with the suppliers a little bit more, but it's not a big difference in the cost of supplies," he said. "Until people become ready, and not just ready, but until they can get a little bit of confidence in the economy ... they're just unsure of what to do as far as additions, renovations or even new constructions. They're operating on fear and uncertainty."

Business for his Mount Olive-based company has been fairly steady throughout the past year, but there might be more tough times ahead for contractors, Godwin said.

"It's been OK, but it's starting to diminish some. People just aren't as eager to build or make additions or renovations," he said.

And the stimulus funding has not hit the local pipeline in a big way, he said. His business is not working on any federally funded projects at the moment.

"It may come later on, but I don't think it's had quite enough time to work to make itself a factor," Godwin said.

Despite a tough market and increased competition for jobs among large construction and contracting companies, the competition for jobs has remained fairly stable among local companies, he said.

"No more (competition) than usual, but yes there is, there's quite a lot of competition," Godwin said.

G&G Builders of Wendell, N.C., operates offices in Goldsboro and Topsail Beach, and was recently awarded contracts to build a new community center in Faison and to construct the new fire station bays for Goldsboro Fire Department Station 4. The company, which mostly handles commercial construction, also recently broke ground on a new facility for the East Carolina Regional Housing Authority on Slocumb Street.

Overall, the market has been down for construction, company spokesperson Jim Heidenreich said.

"It's depressed, that's across the board. It's like the public bid market is about the only thing that's got any activity," he said. "Private negotiation stuff is down."

G&G Builders' materials costs are actually down at the moment, Heidenreich said.

"It's a buyer's market. It's about as economical now as we've seen it in years," he said.

The company recently bid on four stimulus-funded projects, but only won the housing authority job. The competition for that job and for other stimulus projects has been staggering, Heiden-reich said. His company's bid was selected from among 22 bids total.

"It's unbelievable. It's unprecedented," he said.