For construction firms, the recovery is still a ways off (Austin: condominium, lenders)

[CptnRn]

This is a good article on the state of the construction industry in central texas.

For contracting firms, the recovery is still a ways off

a few quotes:

With no way to get financing, developers have put big retail, hotel and office projects on hold. Construction will wrap up by the end of the year on the three major condominium projects downtown, with no new ones ready to start. Many companies are relying on government and health care projects to stay busy.

Bill Farnum, vice president of White Construction Co. in Austin, said that three years ago, White would have been one of four to six general contractors bidding on a job. Now there are closer to 18 to 30 bidders, with large and small firms alike in the mix.

"It just tells you there's not that much work out there, and everybody's grabbing on to the projects that are out there," Farnum said.

Commercial construction is one of the largest sectors of the national and local economies. It has been hard hit in the recession. Since the downturn began in December 2007, Central Texas has lost 6,400 jobs, 13 percent of the region's total, in the category that includes construction. Only the manufacturing sector has had steeper losses.

With each construction job lost, the effects ripple through related industries, and though other parts of the economy are starting to rebound, the pain could be just beginning for contracting firms as the pipeline of new projects runs dry.

Flynn said that although local commercial brokers and developers are starting to see conditions improve, he thinks it will be mid-2011 before general contractors "see any significant improvement in commercial construction activity."

Several local contractors said they think it could be longer, with Watts predicting it could be as much as two years before lenders return to pre-recession levels of lending.

But Flynn said the current downturn is "a really significant" slump.

"It's not over yet, not by a long shot," he said. "It's going to be a slow crawl out, no doubt about it."