Economy Creating Competition for Projects
The economic downturn is creating bargain opportunities for those looking to build houses, schools or other construction projects.
With the recession reducing construction activity in the private sector, builders are competing fiercely for a limited supply of projects and even lowering their bids for public projects such as schools.
"Contractors are a little more hungry," said Tom Janish, finance director for Aberdeen public schools.
Architect Dean Marske said the last three projects designed by his company, HKG Architects of Aberdeen, saw bids come in up to 20 percent under budget.
Bids awarded for construction of Sisseton's fine arts center came to $3.6 million, well under its $4 million budget. Before the recession, four or five companies would typically bid on such projects. Now it is nine or 10, Marske said.
"We really saw an influx of bidders from Minnesota and Sioux Falls," he said.
Marske said he knows of two Minnesota contractors who are bidding projects at cost just to keep their doors open, their equipment running and their employees working so they don't have to be laid off.
More than 50 bids came in for an expansion of the Brown County Landfill, a project that would typically draw about 15 bids, said Helms and Associates civil engineer Sam Muntean.
"Just a huge number of people were interested in that job," Muntean said. "There's not as much private-sector work."
Not everything is cheaper in construction. The contract the city of Aberdeen accepted for 2009 concrete patch work comes with a 15-percent hike in the price of concrete, said Stuart Nelson, the city's assistant engineer. That's partly because cement, an ingredient of concrete, is more costly.
Car vs. Concrete Roof
A home builder has succeeded in his dramatic demonstration to show the toughness of a new concrete house in Greensburg.
Armour Homes on Thursday dropped a junked Honda Civic from a height of 65 feet onto the roof of the silo-style home, which is designed to withstand winds of 200 mph. Greensburg was almost wiped out when an F-5 tornado struck two years ago next month.
After impact, some Greensburg students and volunteers climbed onto the roof to assess the damage. The car was destroyed, but the roof stayed intact without any cracks.
Armour Homes President Dave Moffitt said the impact of the drop put 160,000 pounds of pressure on a portion of the home.
NAHB Cuts '09, '10 Starts Forecasts by 25%
NAHB chief economist David Crowe cut by one-quarter today his housing starts forecasts for this year and next, now saying he's expecting 490,000 starts in 2009 and 649,000 in 2010, according to an early release of his presentation at today's NAHB spring construction forecast conference. Both numbers are sharp drops from the 905,000 starts in 2008 and suggest America's housing industry will take years to recover.
In January, Crowe had predicted 649,000 starts this year, of which 461,000 were single-family homes and 188,000 were multifamily units. Now he's looking for 360,000 single-family homes and 130,000 multifamily units to go up in 2009.
Looking ahead to 2010, Crowe previously projected 664,000 single-family starts and 205,000 multifamily starts next year. He has revised that those figures to 523,000 single-family and 126,000 multifamily starts in 2010.
In essence, Crowe's 2009 predictions were pushed to 2010 given the ongoing housing and economic downturn.