After years of slow recovery after the recession that struck almost a decade ago, area construction firms are reporting strong volume in 2017 and predicting the same, if not better, in 2018. Whether relying on diverse expertise, a widening geographic footprint, or repeat business from loyal customers, there are plenty of ways to grow in the current economic environment, and contractors are optimistic they will do just that.
Even during good times for the construction industry — which 2017 certainly was, to hear area contractors tell it — everyone still has to keep on their toes.
“We’re optimistic for next year, but there are a lot of smart people working in New England, and everyone’s trying to get their fair share of the pie,” said Jeff Bardell, president of Daniel O’Connell’s Sons. “It’s still very competitive, and it’s been that way for a long time.”
While O’Connell is based in Holyoke, the firm has branched out over the years to develop a significant presence in Eastern Mass., Connecticut, and Rhode Island, particularly with large utility projects, while closer to home, it has maintained strong activity at area colleges and universities, including work at Amherst College and UMass, not to mention Dartmouth College in New Hampshire and Marist College in New York.
We’re optimistic for next year, but there are a lot of smart people working in New England, and everyone’s trying to get their fair share of the pie.”
“We’re busy, but not out-of-control busy, in Western Mass. The projects we’re doing now aren’t as big as they were for awhile, but we’re still fairly busy.”
However, the heavy civil side has been a different story, featuring projects like upgrades to the Uxbridge Wastewater Treatment Facility, a runway rehabilitation at Hanscom Airfield in Bedford (one of many projects for MassPort), and a biogas co-generation facility at the Bucklin Point Wastewater Treatment Facility in Rhode Island — not to mention some MassDOT highway work in Worcester and a pedestrian bridge over the Providence River.
“Things are going fairly well for us,” Bardell said. “Everyone is working.”
Kevin Perrier, president of Five Star Building Corp. in Easthampton, had a similar outlook, noting that “2017 has proven to be one of our busiest years, with work from one end of the state to the other. Both public and private work has certainly kept our guys busy, and it looks like next year will be more of the same.”
While margins are still tight, workload has remained busy, including two large mechanical upgrade projects for MassPort and increasing work at Logan International Airport over the past several years.
While those two firms have broadened their reach, Chicopee-based A. Crane Construction recorded a strong 2017 mostly close to home, said partner A.J. Crane. “We do a lot of local, private commercial work, and it seems that sector is booming, with a lot of small to medium-sized businesses either building new facilities or renovating their existing facilities. It’s nice to see. And we’re helping as much as we can with that, which we really like to see.”
Recent projects include a remodel of the Sunshine Village offices in Chicopee, Arrha Credit Union’s new West Springfield branch, a new office for Ameriprise Financial in South Hadley, two renovations for Oasis Shower Doors, an office renovation for Noonan Energy, and ongoing work for Ondrick Natural Earth and AM Lithography.
“We’re in that sweet spot between small firms and huge commercial industrial contractors,” he told BusinessWest. “We’re a good size where we can serve a lot of those people that are upgrading and building new, local businesses. We’ve recently serviced quite a few financial-services offices, some retail, and, obviously, the whole legalization of medical and recreational marijuana is going bananas, and we’re doing quite a bit of that, too.”
Clearly, these are high times for area builders, and they expect to keep rolling in 2018.
Bardell said O’Connell’s broad geographic footprint — and its expertise in many different types of work — are both hedges against shifting economic tides.
“We see it rotate from place to place. I would say from ’09 to ’12 or ’13, we were really busy in Rhode Island, hundreds of millions of work there. Now we have maybe $20 million in work there. When we’re not busy in the Eastern Mass. region, we’re doing a lot of work for MDC in Hartford, redoing their treatment plant. It just rolls from one area to the other.”
As a result, he went on, “we pursue a lot of college work, and then we pursue heavy civil work. We do bridges, water and wastewater plants, drinking-water facilities — those have kind of become the bread and butter of our company.”
From a backlog standpoint, O’Connell is in pretty good shape, he told BusinessWest, but firms need to stay aggressive. “Talk to any contractor, and they’ll say they’re looking for more work; you burn it off quickly. But we’re here working through the holiday, with a lot of projects coming out in all kinds of places. There are projects in the Hudson Valley in New York out to bid right now, projects with Connecticut treatment plants, a very large university job in upstate New York, and some treatment-plant projects in Rhode Island.
Now boasting 50 employees, Five Star has developed a strong presence out east as well, opening a Boston office to support the “booming” seaport and commercial construction happening there. Long-term relationships with airlines like Southwest and Jet Blue have kept the firm busy at Logan, while projects like a new Westborough Town Hall, a library in Sherborn, a new charter school in Plymouth, and the Uxbridge fire station attests to the company’s diversity. Closer to home, major projects have included new life sciences laboratories at Holyoke Communtiy College and an ongoing upgrade of the entry at Noble Hospital in Westfield.
“Between healthcare and the airport and transportation sector, we’ve found ourselves all over, with a lot of long-time clients keeping us very busy this year,” Perrier said. “We’re fortunate enough to have another $30 million on the books for next year, so we’re happy about that.”
One goal has not to become too focused on one particular niche or industry, like some companies that focus almost all their energy on, say, healthcare or auto dealerships, he went on. “We’ve always been somewhat reluctant to do that, because it makes you more susceptible to shifts in the economy. We’ve been lucky to have some diversity and to be spread out across the state.”
That said, he added, “we’ve seen our fair share of the work. It’s safe to say the bad economy is behind us. Everyone has a pretty full plate.”
Crane has diversified in other ways, opening divisions in property management and condominium management, and taking on more and larger commercial jobs. And customer loyalty is important, because a construction job might lead to other jobs down the line. “We’re not just building someone a new, 5,000-square-foot facility. They’ll call us for everything else, which is nice.”
The benefits of a strong local construction market are twofold, Crane went on. “Businesses are spending money on their real estate here, which brings everybody’s property values up, and second, if they’re investing in property here, that means they’re not moving their business anywhere else, which is huge. Everyone knows construction drives the economy.”
Perrier says contractors remember what the recent recession years were like — and how many years it took to return to something resembling normalcy — so everyone is a little gunshy, but they’re also optimistic that a strong 2017 will spill over into an even better 2018.
“The last two or three years, the economy has been strong,” he told BusinessWest. “We’re fortunate to stay busy. During the recession, most general contractors just wanted to keep people busy, try to see some growth and not lose their key players, and weather the storm. We made it out of that, and we continue to see growth. Last year was one of our best years.”
Bardell added that most operations professionals in construction will say they don’t have enough good, quality workers.
“It seems like things are picking up a little with availability of work to pursue, so we’re pretty optimistic, to be perfectly honest with you,” he said. “The biggest problem is finding people to do the work. That’s not getting any easier, and it’s going to be the biggest issue for us. We actively recruit at a lot of colleges; we’re trying to build a little farm team of guys and gals who can move up the ranks. We’ve been pretty successful doing that, but sometimes you can’t keep up with the volume.”
Not that high volume is a bad thing, of course.
“Things were good last year, and next year is looking great, too,” Crane concluded. “Hopefully it keeps rolling.”
Joseph Bednar can be reached at [email protected]