Surprise of surprises: Masonry contractors are busy in Texas.
“I have 16 crews and almost all of them are booked midway through winter,” says Bradley Clay, the executive director of business development for Brazos Masonry in Waco. “I've talked with people all over the state and everyone has a strong market.”
Of course in the current economic climate, even the busy contractors are fighting to keep their heads above water. Clay's Brazos Masonry saw a $1 million decrease in revenue from 2007 to 2008. Fellow Texas company Artisan Masonry in Garland saw an increase of $400,000 in 2008, but that was hardly enough to cover the company's cost of doing business.
“We are expecting a small increase over the next 12 months, however, with lower margins,” says Artisan's president, Robert Gladu.
The second quarter of 2009 marked the first time in three years that housing prices began to rise, but that was after a steep decline. The low price of housing, coupled with the increase in competition for the existing jobs, means that contractors have to do more work for less, raising overhead costs in an effort to stave off a drop in revenue. Further complicating the issue: Contractors are concerned about inexperienced companies with questionable business practices bidding on projects at unreasonably low rates.
“Our revenue is down approximately 50% and we have a small backlog,” says R. Gary Tiemen, president of Maverick Masonry in Glendale, Ariz. “We are in survival mode.”
With housing still comatose, many expect only a slow, jagged recovery. And with the credit crisis slowing new investments, and lower tax payrolls hurting public projects, many masonry contractors are fighting to stay alive. But they are staying optimistic about the long term and are focusing on improving their industry.
In MASONRY CONSTRUCTION's Top Masonry Contractors annual survey, McGee Brothers of Monroe, N.C, was knocked from its seven-year perch as the largest contractor by Western Construction Group of St. Louis. It's no surprise that Western derives all of its revenue from renovation work. Its rise to the top highlights the newest trend: the growing importance of renovation and restoration to the masonry industry.
Western Construction's revenue increased by $3 million, while McGee Brothers was hurt badly by the record drop in housing starts and the dearth of commercial work. McGee's revenue fell by more $40 million in 2008; 70% of its revenue is derived from the residential segment and 25% from new commercial construction. McGee's chief financial officer, Neal Parker, expects the company do be down another 25% in 2009.