By Mike Fitts
mfitts@scbiznews.com
Published Jan. 24, 2011

While construction contractors were expressing some guarded optimism about 2011 in a national survey, South Carolina’s respondents had wildly varying levels of optimism depending on their sector.

Responses from South Carolina were the most divergent by industry of any state, according to AGC economist Ken Simonson.

In the survey released Monday by the Associated General Contractors, 80% or more of highway and transportation contractors in the state expected a lower amount of projects up for bid in the new year, in terms of dollar value. The rest of the respondents expected a similar market to 2010.

For water-sewer contractors, 75% expected a lower value of potential contracts in 2011, with the rest foreseeing no change here.

On the optimistic side, 50% of contractors doing business with the power and manufacturing industries said they expected greater opportunities in the new year, with the other 50% expecting the same level of available business. Of those contractors doing business with hospitals and higher education, 56% expected higher contract levels in 2011, while 33% expected the same level and 11% expected lower value of available contracts.

Nationally, contractors showed some optimism for recovery, with 27% of firms expecting to add staff in 2011 versus 20% expecting to lay employees off. In 2010, 55% of firms conducted layoffs while only 20% added workers.

In South Carolina’s survey, 26% of contractors expected to add staff in 2011, while 16% expected to lay off more people. The remaining 58% either expect no change or did not know.

For contractors, the economy still is difficult. Unemployment in the sector nationally continues to run above 20%, and companies have been unable to pass along the rising costs of materials, association CEO Stephen E. Sandherr said.

In the survey, 7% of contractors said they had made bids for contracts that lost them money in the past year.

“This won't be an easy year for most firms, but it will be better than last year,” said Sandherr.

In the South Carolina survey, one-third of respondents said they had been awarded a federal stimulus contract, with an average dollar value of $925,000. Also, 22% of those responding said they had bought new construction equipment because of the stimulus.

The stimulus has been a boon to the industry, according to feedback from contractors, Simonson said.

“We have consistently maintained that we would not like to see what our industry would look like without the stimulus,” Simonson said.

AGC’s national leadership expressed concern that Congress still has not passed long-term infrastructure legislation such as a five-year highway bill. The competitive need for better infrastructure should be something that both the White House and Congress can agree on, Sandherr said.