Durham commercial contractor Chuck Wilson Jr. has a problem that the Triangle's beleaguered residential builders would love: He can't find enough employees to keep up with all the projects available.
"If we had more people, we could do more work," said Wilson, whose company, C.T. Wilson Construction, had revenue of about $45 million in 2007 and expects to surpass that this year. "There's tons of work out there."
Residential sales are dropping as credit has tightened, but there's no slowdown for Triangle contractors, thanks to a huge backlog of government, educational and private projects.
Last year, total value of commercial building permits for Wake and Durham counties rose 53 percent to $1.9 billion, the highest in seven years.
This year, commercial activity will increase about 4 percent, even with projects like a $550 million Raleigh-Durham International Airport terminal and the $220 million Raleigh Convention Center winding down, according to Tony Plath, a finance professor at the University of North Carolina at Charlotte. Statewide, commercial construction will increase by 1.5 percent.
"You're a golden little bubble of economic prosperity that doesn't exist many places in the U.S.," Plath said. "When we look out our window, it's raining just about everywhere but here."
The bustling sector contrasts sharply with the slumping residential market, where Triangle new home sales fell nearly 10 percent in the first three quarters of 2007 and are expected to drop further this year. But there's also a downside.
Busy contractors, who helped keep unemployment low last year by hiring electricians and plumbers idled in the housing slowdown, have filled most of their empty positions. The most recent Triangle jobless rate held steady at 3.8 percent in November, although U.S. unemployment hit 5 percent, a two-year high.
Builders acknowledge that not all the expected projects will be built. With a deepening housing slump, some worry that expensive condominium tower projects could be canceled or delayed.
Towers coming
In downtown Raleigh, Empire Properties is planning the $80 million Lafayette Hotel, which will have 125 rooms and 80 condominiums in a 22-story tower, and Roland Gammon, Craig Davis and Roger Perry are building the $175 million Site One, which will have two towers with 700,000 square feet of offices and at least 200 condominiums.
A parking deck for Site One is under construction, but work on offices and condos, not scheduled until 2009, will depend on presales and landing an office tenant. Gammon said there was enough time to market the condos and find a tenant. "We feel pretty positive," he said.
Either way, there's plenty of work. Developer Roger Perry is starting East 54, a $50 million mixed use project with offices, condominiums and retail in Chapel Hill. And Wake schools' $1.1 billion expansion will add 17 new schools between 2007 and 2010.
A legislative appropriation will add $614 million in building projects to the University of North Carolina system this year. They include a $114 million library on the N.C. State University Centennial Campus, $34 million for the College of Engineering and a $38 million hospital at the NCSU Veterinary School. UNC at Chapel Hill is getting a $119.6 million genomic sciences building, and the School of Dentistry is getting a $75 million oral sciences building. N.C. Central University is planning a $27.5 million nursing school.
One of the Triangle's largest construction companies is Clancy & Theys. Last year, the Raleigh-based contractor had record revenue of about $500 million. Besides the genomics facility, Clancy & Theys is building a $20 million expansion of Carmichael Auditorium and a $20 million baseball stadium at UNC.
"We'll be exceptionally busy," said company vice president Scott Cutler. "The only question is ... the market doesn't know how many of these projects that involve residential components will actually happen."
Barnhill Construction of Tarboro last year had record revenue of about $200 million, partly because it was co-general contractor of the Raleigh convention center. Barnhill now is starting a $70 million N.C. Museum of Art building and three Wake County high schools costing $60 million each.
"2008 will be another great year," vice president John Muter said.
