GSA Daily Staff Report
Published April 9, 2010

Construction activity slipped modestly in the fourth quarter of 2009 across the Carolinas, according to an economic barometer released by a contractors’ organization.

The Carolinas AGC reported that its construction barometer dropped 2.5% in the fourth quarter, leaving it close to where it was at the end of 2008. Some regions in the two states offer bright spots, the Carolinas AGC said, with South Carolina declining less than North Carolina.

Upstate South Carolina was down 3%, while the Lowcountry score was up 1%. Financial market conditions for long-term equipment financing needs strengthened noticeably in the Lowcountry, with contractors reporting easier borrowing terms from regional bankers. This trend was not matched in the Upstate, the AGC reported. Highway construction was reported to be more active in the lower half of the state than in the Upstate.

Financing still is problematic, according to the Carolinas AGC’s survey of its members. Credit for nearly every construction-related purpose remains difficult to get or renegotiate and is expensive. Contractors expressed little optimism that this will improve as 2010 proceeds. In the Lowcountry, however, contractors reported stronger lending on financing long-term equipment needs, a trend not matched in the Upstate.

The overall measure of business and employment activity dropped 5.7% in the quarter. Prices for construction materials and equipment both were declining as 2009 ended, according to the Carolinas AGC.

Financial market conditions for long-term equipment financing needs strengthened noticeably in the Lowcountry, with contractors reporting easier borrowing terms from regional bankers. This trend was not matched in the Upstate, where contractors reported continuing difficulty in obtaining both short- and long-term financing. Although demand for heavy equipment remains lethargic in both the Upstate and Lowcountry, contractors reported modestly rising materials costs.

Highway and utility construction across the two regions also differed; in the Upstate, contractors reported sharply lower highway activity, while in the Lowcountry activity remained unchanged.