Contractors Looking Ahead In Bleak Economy

By Jennifer Rice, Staff Writer of Fox Valley Labor News

There is no doubt the future for the construction market looks bleak, but with nowhere to look but up, the construction industry is looking ahead to economic indicators that will bring back jobs.

The nation has weathered the longest and worst recession the nation has seen since the Great Depression and economists say it ended in June. But that doesn't mean we're going to start seeing job increases anytime soon.

Executive Director John Brining of the Construction Industry Service Corporation (CISCO) said his industry measures recovery in unemployment numbers and jobs and he said the rate is still too high. "We're not seeing jobs coming at any level that will help sustain us to get us back to where we were before," he said.

Brining spoke last week as part of a two-day Plumbing and Mechanical Contractors Authority of Northern Illinois (PAMCANI) conference held in Downers Grove. He provided startling statistics that showed the U.S. has had a 4.1 percent drop in the GDP and a 62 percent decline in singlefamily home construction, resulting in 25 to 35 percent rates of unemployment in the construction industry.

Interest rates are at an historic low. Brining said if contractors can afford to build and have the resources to build, now is the time. "I've been trying to deliver this message to the user community every time I get the opportunity," he said. "You couldn't pick a better time to build. Interest rates are low. Contractors are competitive," he added. Once consumer confidence comes back, people will start to spend, which is the economic engine for the economy.

In the Chicagoland area, residential construction took a big hit. "We've never seen a decimation like this. This forecast for new housing was 3,000 for the whole year," Brining said. "When we were rockin' and rollin', we had 3,000 new homes a quarter." Economists predict it will be 2015 before the construction industry sees 10,000 new homes for the year.

And when new home construction does start, homes are going to be small, singlefamily homes in the $300,000 range. "In the future, bigger isn't always better," Brining said. Population growth in the next 40 years will increase the metropolitan Chicago area from 8.7 million to 12 million people. "This sector is encouraging. All these people are going to have to live somewhere," Brining said.

Other developing sectors include senior housing, older properties, public works and apartment complexes. Project Labor Agreements (PLA) also may become increasingly popular. Walmart and Sam's Club both recently signed a $3.1 billion PLA with Chicagoland building trades.

"They are going to build 25 new stores and distribution centers. It's all under a PLA and the threshold is $5,000," Brining said. "To me, this is the best PLA that I've ever seen and it's a good model for what we think we ought to be doing with other PLAs."

He would like to see more excitement when building partnerships and coalitions among labor management, the business and user community and various chambers of commerce.

President of the Chicago Federation of Labor (CFL) Jorge Ramirez echoes Brining's need to create partnerships and coalitions. A part of securing Walmart coming to Chicago, Ramirez said it happened only after the CFL got together with organized labor, community groups and civic leaders to approach Walmart.

"It was in our shared interest to make sure we're working together," Ramirez said. In doing so, Walmart agreed to a 21-county labor agreement, agreed to use $20 million to improve community education and create economic opportunities and agreed to union labor for construction and remodeling.

"We needed that joint effort among labor, business, elected officials and industry," Ramirez explained. "And we need more of it. When we collectively go to Springfield, it makes it very difficult for elected officials to say, 'I can't be for that bill.' It's very hard for them to wiggle out of a piece of legislation when they are looking at all of us. In the past, that's where we've made mistakes," he added.

A collected front is the protector of the middle class. Ramirez said partnerships make it possible to rebuild the middle class. "It can't get much worse. It's going to change; it's just a matter of when. We've weathered the brunt of the storm and if we move together in a strategic way, we will get the lion's share of the work when it comes or way," Ramirez said.

From left, Barry Thomas, PAMCANI alliance president; Jorge Ramirez, president of the Chicago Federation of Labor; Robert Melko president of Bishop Plumbing and Heating, Chairman of Union Affiliated Contractors of the NA-PHCC; John Brining, executive director of CISCO and S.J. Peters, PAMCANI executive director, are pictured during the second day of PAMCANI's annual conference in Downers Grove.

This article originally appeared in the Fox Valley Labor News October 28, 2010