The Springfield News-Leader reported Tuesday (August 4) that construction spending is up nationwide. Specifically, spending on private residential construction is up, both nationwide and locally. HBA of Greater Springfield CEO Matt Morrow is interviewed for the story, along with Springfield Contractors Association President Dave Robertson, commercial contractor Lowell Thomas (Rich Kramer Construction) and Missouri Department of Transportation spokesperson Bob Edwards.
August 4, 2009
Local contractors see more projects
Rising construction spending part of national trend.
Construction spending nationally rose for the second time in three months fueled by increases in residential building and government-funded infrastructure projects.
The report provides evidence the housing sector may be recovering, while the rise in government spending was partly due to the Obama administration’s $787 billion stimulus package, economists said.
The Commerce Department said Monday that construction spending increased by a seasonally adjusted annual rate of 0.3 percent in June, defying analysts’ estimates of a 0.5 percent drop. May construction spending was revised up slightly to a 0.8 percent decline. Still, June’s $965.7 billion in spending was 10.2 percent below the year-ago level.
In Springfield, contractors are beginning to see more projects up for bid, after the industry saw little activity in late 2008, said Lowell Thomas, who is in charge of sales and marketing at Rich Kramer Construction.
“There are some government-funded projects available,” Thomas said. “And there is a pickup in locally-funded projects.”
For example, area school districts and O’Reilly Auto Parts have recently sought bids for their building projects, Thomas said.
“I think people are more optimistic about the economy,” Thomas said.
The federal stimulus plan has quickened many transportation and military projects in the area that had been scheduled for coming years, said Dave Robertson, president of Springfield Contractors Association.
The Missouri Department of Transportation, for example, expects to receive $525 million from the American Recovery and Reinvestment Act.
In southwest Missouri, about $66 million worth of road projects are slated for stimulus funding.
All the projects must be under contract by June 2010, said Bob Edwards, a MoDOT district spokesman.
One of the major projects is the widening of U.S. 65 to six lanes between Interstate 44 and U.S. 60 in Springfield, and it has been recently bid out for $26.9 million, Edwards said.
In addition to road projects, local contractors are seeing more projects from regional military bases, such as Fort Leonard Wood, Robertson said.
In Springfield, the AVCRAD facility for the Missouri Army National Guard has recently solicited bids for improvements, Robertson said.
For the first seven months of this year, the city of Springfield issued 3,952 permits, down from 4,980 for the January-July period of 2008, but the monthly gap appears to be closing.
In residential construction, the local market appears to follow the national trend, said Matt Morrow, executive director of the Homebuilders Association of Greater Springfield.
After seeing 22 consecutive monthly drops in housing starts, Greene County issued more residential permits for both May and June than for the same months a year earlier, Morrow said.
“There are two straight increases,” Morrow said. “That’s a good sign.”