Masonry Construction - Septemeber 2010

september 2010

Showcase:

Fighting Fire With Masonry page 18

top contractors:

Niche Markets Offer Hope page 25

Returning to Haiti page 28

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Top Contractors Survey

Bright Spots in a Struggling Market Masonry contractors look to exploit niche markets.

B.W. Dexter

By Josh Krol

www.masonryconstruction.com

T

he Big Bad Wolf huffed and he puffed but he just could not blow the house down. The masonry industry can take away a lesson from the Three Little Pigs fairy tail, and not just because the third little pig outsmarted the wolf by building his house with brick.

If there ever was a Big Bad Wolf, it would be the troublesome U.S. economy. As its winds blow, the industry may be battered and beaten, but it still stands tall.

As the construction industry tries to rebound from one of the worst economic downturns since the Great Depression of the 1930s, Masonry Construction's Annual Top Contractors survey shows masonry contractors are finding ways to overcome the hardships through building schools, public works construction, and repair/restoration. They are being forced to expand their markets in an attempt to stay afloat. “Diversification is key in this economy,” says Robert Gladu, president of Artisan Masonry in Garland, Texas.

Our survey respondents' revenue dropped 26.2% from 2008 to 2009. This is not surprising, considering nonresidential construction remains stuck in neutral and overall construction has fallen for the fifth consecutive year.

“The economy has forced us to downsize approximately 50%,” says Bruce Dexter, president of B.W. B.W. Dexter worked Dexter II Inc. in Danielson, Conn. “We on the C.B. Jennings have been forced to lay off employees that Elementary School in have been working with us for 20 years.”

New London, Conn.

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Artisan Masonry

Masonry was a major component of the new Charles D. Duckworth building in Garland, Texas.

Artisan Masonry was the mason contractor.

Despite the hard times, mason contractors can take advantage of niches in the marketplace. While these will not bring the industry back to the heyday of the last decade, they will keep business alive and allow money to flow through the balance sheets.

Education As the nation's population continues to expand, school attendance will also increase. Many see masonry as the sensible building choice.

In 1999, $18 billion was spent on new school construction, according to the Portland Cement Association.

The total for the next three years is projected to be $74.5 billion. Looking ahead eight years, it is estimated

that 6000 new schools will be built.

At a 90% market share, masonry construction will account for over 5400 of those new schools, the PCA says.

“Schools have been keeping us busy,” Gladu says. “This market is now 70% to 80% of our business, compared to the past where it was only 20%.”

Similarly, Terry Burgess Sr., president of Burgess & Burgess Masonry Construction Inc. of Clifton Springs, N.Y., says his company's most important projects last year was for the Fairport and Red Creek school districts.

Tight school budgets necessitate quality construction that lasts.

School districts rely on voters to pass tax levies for new school construction, so officials must persuade the

[WEB EXTRA ] For a closer look at the masonry contractors who participated in our Top Contractors survey, visit www.masonryconstruction.com. Here, you will also find an update on current brick production from the major manufacturers.

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September 2010

• Masonry Construction

public that it is paying for a quality building. Masonry’s long-term benefits of durability, affordability, low maintenance, and pleasing physical appearance is just what the principal ordered.

“The deteriorating physical condition of the nation’s public schools actually presents an opportunity for federal spending that is targeted to near-term growth, by creating highquality jobs. That also provides longterm benefits by building a better learning environment,” says Mary Filardo, a member of the Advisory Board of the National Clearinghouse for Educational Facilities.

Public construction A little more than one-third of our Top Contractors are involved in public works projects such as courthouses, military facilities, jails and prisons, and tourist centers.

www.masonryconstruction.com

Restoration While new construction has declined, the masonry restoration business has been solid. “The restoration business has done extremely well,” says Karen Forrer, president of Masonry Restoration Inc. in Milwaukee. "Things have been very steady for us.”

Some contractors have reversed their business ventures in favor of restoration. “Whereas 5 to 10% was remodeling and restoration in the past, now it is 90 to 95% of my business,” says John Frisch, president of Western

www.masonryconstruction.com

Artisan Masonry

Artisan Masonry worked on the new Harry McKillop Elementary School in Melissa, Texas. Masonry contractors are counting on new school construction for additional business in the upcoming year.

Lang Masonry Contractors

“Public works is an important part of our business,” says Lindon, Utahbased IMS Masonry Inc. “Most of our work comes from government projects.” While IMS entered 2010 with a backlog of work, the contractor is concerned about a lack of business going into 2011. Similarly, public works projects account for 90% of Burgess & Burgess' business.

The military is also providing a slight boost for the construction industry, and masonry contractors are looking to build on this trend.

The Department of Defense Military Construction Program's spending plans include $2.18 billion for new barracks and hospitals for the armed services.

“The MCAA is looking to educate the military and talk to senators about using masonry,” says Damian Lang, marketing committee chairman for the Mason Contractors Association of America, and president of Lang Masonry Contractors in Waterford, Ohio.

One such project was awarded to Barnhart Inc. in San Diego. Forty masons worked on the $24.6 million Wounded Warrior barracks at the U.S. Marine Corps' Camp Pendleton near San Diego.

Steve Ross, office manager for Thameside Masonry in San Francisco, agrees with what many other contractors are saying. The market is “very competitive, but jobs are still available,” he explains.

Huntington Park is home to the Columbus Clippers minor league baseball team in Columbus, Ohio. Lang Masonry Contractors of Waterford, Ohio, worked on the stadium which seats 10,000 fans.

Masonry Inc. in Woodinville, Wash.

Despite niches like schools, military, and restoration, some feel the masonry industry must do a better job putting its foot forward. Frisch, who also is president of the Residential Masonry Contractors Association, says the industry should improve its marketing and promotion efforts. "We have not been stepping up and taking care of business," he says.

Lang agrees, saying, "Masons continue to lose market share." Promotion must be increased to educate the public about masonry's long-term benefits rather than short-term costs.

“The future is bright but we can’t control the market,” says Pat McLaughlin, executive director of the Masonry Association of Florida. “You can’t control the size of the pie, just the size of the slice.” MC

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