Eric F. Anderson is the executive director of the Rhode Island chapter of the Associated General Contractors (RIAGC). The RIAGC is one of a nationwide network of 100 chapters chartered by the Associated General Contractors of America Inc. (AGC). Anderson recently took some time to talk to Providence Business News about the economy and its impact on commercial construction in Rhode Island.
PBN: Can you start by telling us a little about RIAGC and the firms you represent?
ANDERSON: Our membership is composed of general contractor and construction management firms involved in construction of commercial, institutional, industrial and government buildings. Associate members are commercial construction industry-related specialty and subcontractors, architecture firms, engineering companies, banks, insurance companies, law firms and equipment manufacturers. We promote construction work force development, positive labor-contractor relations, safety, professional education, and the principles of skill, responsibility and integrity. We also devote efforts to government relations, market development and issues of interest to the commercial construction industry and the people of Rhode Island.
For example, our work force development efforts include cooperation with BuildRI, a labor-management partnership organization, to provide a $250,000 grant from the union-supported RIAGC Industry Advancement Fund. That money will help renovate office and classroom space that The Providence Plan is leasing for its YouthBuild and Building Futures Providence job training and education programs in Olneyville. We also work with the RIAGC student chapter at Roger Williams University and help defray expenses of RWU construction management students attending the annual construction management competition sponsored by the Associated Schools of Construction and our national AGC organization. Our chapter has provided $10,000 grants in each of the last three years to the New England Laborers charter school in Cranston. In addition, we have worked with secondary schools, such as the Warwick, Cranston and Chariho career and technical centers to accredit their residential carpentry programs.
Another achievement is the collective bargaining that our Labor Relations Division provides on behalf of our designated signatory members with unions representing the bricklayers, carpenters, cement finishers, iron workers, laborers and operating engineers. We negotiated contracts this spring and summer with all these unions – contracts that are now set to expire at the end of May 2013, except for the carpenters’ contracts that expire in May 2011. Another important activity is our sponsorship of a local Construction Leadership Council (CLC). The CLC is part of a nationwide network of AGC chapter-sponsored organizations that facilitate professional development, networking, the building of social relationships and the exchange of ideas among early- and mid-career construction professionals.
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PBN: Along with the recession came a fall in commercial construction. How drastic has the drop been for your members and do you see it turning around anytime soon?
ANDERSON: Among the services that economists at our national AGC headquarters provide are analyses and reports on construction employment figures published by the U.S. Bureau of Labor Statistics as well as construction-related data from a variety of private sources and their own surveys. Their most recent report on preliminary BLS figures for July showed that Rhode Island moved to 12th place from 21st in June among all the states and the District of Columbia in the percentage of jobs lost or gained for the previous year. We gained about 500 construction jobs of all types from June to July, but still showed an overall loss of 2,300 jobs, or 11.2 percent, from July 2008 to July 2009. However, the June-to-July 2009 gains seem to be primarily in the heavy/highway construction and residential markets.
Because our members are involved with construction of nonresidential buildings and that market is taking longer to recover, our commercial construction contractors are still coping with a very tough situation. What makes it particularly difficult is that nonresidential construction usually lags behind a general economic recovery – sometimes by many months, but we are cautiously looking forward to some gradual improvement. Because there will not have been any overbuilding – to say the least – for several years, the outlook after 2011 should be positive.
PBN: Do you find that businesses are opting to renovate rather than build new construction because of the economy and, if so, has that had an effect on your members?
ANDERSON: Usually, when access to financial markets dries up, people do prefer to renovate rather than build new. Some of our members are doing that for established clients.
PBN: Do your members find that the increasing interest in building “green” has changed how they operate or created new opportunities?
ANDERSON: So far the opportunities have been limited – particularly during the recession, but some members have been involved with green projects and we do foresee more opportunities in the future.
There are a number of issues that contractors must address in building green, including sourcing of materials, more detailed specifications and risk management. AGC has partnered with other organizations such as the U.S. Green Building Council and the former Green Building Initiative to offer seminars and webinars, and the online AGC Bookstore offers publications on the subject. Of course, individuals within member companies also have become LEED-certified and pursued additional avenues of learning. So when the opportunities arise, we have members who are well-prepared to satisfy the requirements of green construction.
PBN: Have any of your members benefited from the federal stimulus and to what extent?
ANDERSON: Most of the stimulus money went to transportation projects, and RIAGC members are primarily involved with constructing buildings. Some stimulus money was directed toward renovating and making government buildings and schools more efficient. It certainly would help the Rhode Island economy if some of that money surfaced for projects here. Right now I don’t know of any members who have benefited specifically from any federal stimulus money.
