The weather is warming, flowers are blooming and construction firms across Connecticut are performing their annual rite — hoping business is busier this year than last.
“There’s a lot of wishful thinking,” said Bill Cianci, executive director at the Construction Institute in Hartford.
The economic downturn hit many sectors in Connecticut, but construction was among the worst. In 2007, employment in the industry hit an all-time high at 69,600; but a major dip in projects during the recession dropped that figure 29 percent, its lowest level since 1996, according to the Bureau of Labor Statistics.
Although 2010 was better than the previous two years, construction still lost 7 percent of its jobs, putting statewide industry employment at 49,400. The number of construction firms dipped as well to 9,400 — 93 percent of which employed fewer than 20 people.
The last two years were the worst two on record in Connecticut for new housing permits, and 2011 will be the third lowest, according to the Home Builders Association of Connecticut.
But the industry’s wishful thinking might not be in vain this year. A variety of state, federal and municipal projects offer millions in available work, and the state General Assembly is working on legislation to streamline the permitting process for new private construction.
“The governor has an aggressive program,” said Don Shubert, president at the Connecticut Construction Industries Association. “They are going to be putting out a lot of work.”
With Gov. Dannel Malloy lending his political and state financial support to the proposed New Britain-Hartford busway project, construction firms are hopeful physical work will begin sometime this year, Shubert said. The overall cost of the project is $570 million, although some of that is for property purchases.
The General Assembly’s Education Committee approved $285 million for 22 new school construction projects for the year, although the Finance Committee still needs to sign off on those figures.
The number of school projects is the lowest in 14 years; but given the state’s budget constraints, the industry is pleased to have the work, said Matt Hallisey, CCIA director of government relations and legislative counsel.
“We are very supportive of additional school funding,” Hallisey said. “Those are real projects, and those are real jobs.”
Malloy’s proposed budget includes $572 million in funding for various Department of Transportation capital projects. Nearly $70 million has been set aside for paving state roads, which is important in getting pavers back to work, Hallisey said.
As the number of public and private construction projects dropped during the recession, companies got more competitive in bidding for contracts. That drove down the cost of construction, giving clients a savings that was often used to get more construction work started.
That may not be the case this year, Shubert said. The rising cost of oil will drive up material costs, offsetting any decreases created by the competitive market. Asphalt will cost more, leaving pavers the option of eating the cost or passing it into their contracts.
“The towns and the state are going to get less paving for the dollar,” Shubert said.
The timing of state construction projects leaves uncertainty heading into construction season, which runs from May to November.
Between identifying, permitting, bidding and awarding projects, the lead-in time for a contractor to receive a notice to proceed on a public project is several months. If the General Assembly waits until June to approve the state budget, work might not begin until September, leaving only a few months in the building season.
The federal government’s delays in funding compound the problem, Shubert said. Congress has not approved a federal transportation bill since 2005, leaving proposed state projects wanting for federal dollars. The recent turmoil over appropriations — threatening a federal government shutdown — increases the uncertainty.
“When it is uncertain in Washington, it affects everyone in Connecticut,” Shubert said.
Thanks to funding the state Department of Transportation received before the federal issues arose, Connecticut will have projects moving forward. The biggest is the $357 million I-95 New Haven Harbor corridor project awarded to O&G Industries of Torrington.
The Metropolitan District Council in Hartford is rolling out $52 million in projects, thanks to clean water funding received from the Department of Environmental Protection. The MDC plans to award three or four sewer separation projects with the funding, each with a construction window of 12 months.
Most of the interest in MDC projects comes from Connecticut contractors, said Bill Hogan, MDC durational engineer.
The Home Builders Association of Connecticut declared legislative victory last week after six bills helping the industry passed committee and were sent to the floor of the legislature. The bills all make the permitting process in the state easier, either by streamlining the approval process or extending their expiration deadlines.
Any permitting changes might not have a major impact this year as the new laws won’t go into effect until the construction season reaches its midpoint, but they would help the industry in years to come.
When next spring rolls around, the industry will have more reasons to be hopeful.
