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B’ham Construction Industry Stays Active Despite Economy

Fri October 10, 2003 - Southeast Edition

Despite an ever-evolving construction industry, one thing remains constant in Birmingham, AL: the city boasts one of the strongest and most successful groups of contractors of any city in the country.

Remarkably, Birmingham’s construction star continues to shine nationwide in the face of sweeping changes in the local marketplace. For example, the 1980s brought union and minority set-aside concerns. Today, health care and a shortage of skilled labor are mounting industry issues.

By the mid-1980s, most Birmingham construction companies operated open shop and many operated well outside a 50-mi. radius of the city. But those changes led to other concerns.

“Twenty years ago we were blessed with a large number of union craftsmen who were working on non-union work, but they were skilled and of sufficient numbers,” said Miller Gorrie, chairman and chief operating officer of Brasfield & Gorrie. “In the last 20 years, those people have retired and grown old and we don’t have that group to draw on. We’ve had to pull people out of trade schools and train them on the job without any formal apprenticeship program. About 10 years ago, our company began its own apprenticeship program. It’s targeted at specific areas; it’s not broad. But we do train foremen, field engineers and carpenters. We have our own facilities and we have two full time trainer-coordinators.”

Thomas Doster, CEO and chairman of Doster Construction, acknowledges the labor problem but says he believes the quality of construction has improved.

“I think it may have something to do with the owner getting more involved in selecting the contractor,” Doster said. “You get a better quality project if you pre-qualify contractors and select from a small group. That raises the quality as opposed to 20 years ago when there was more hard bidding going on.”

Riley Stuart, retired chairman and CEO of Brice, noted another change, “You don’t see any drawing tables in the offices. I was in an architect’s office the other day and didn’t see a drawing table. They said they had a community one, but no one uses it.”

“The main difference in the industry is the technology that’s caused things to be done differently in the office — computers, fax machines, cell phones, palm pilots — all those things have made the estimating and management processes in the office much more efficient,” said Gorrie. “Of course you have similar things in the field with improvements on the equipment that have made the methods of construction more efficient and less dependent on labor and more dependent on equipment. Improved communications and transportation have allowed contractors to expand their scope of operations. Years ago most of the contractors operated within 50 miles of their home office, and now it seems they go as far as a client would take them.”

Technology affects everyone said Bill Crawford, executive vice president of the Greater Birmingham Association of Homebuilders.

“The builders operate differently than they did 20 years ago,” Crawford said. “What changed is the technology that allows the builder to better manage the job.”

He said that the most significant change for residential construction had nothing to do with technology, however.

“The most significant change occurred in 1994 when the Alabama Homebuilders Licensure law went into effect,” Crawford said. “That requires homebuilders to be licensed by the state and that has increased the professionalism in the industry.”

W.A. Caton, president of Sequoia Construction Co., said that beginning nearly 10 years ago, construction management caused a big change from the perspective of a smaller commercial contractor.

“Bid work in Birmingham is different now because construction managers tend to group jobs together and make them bigger ticket items,” Caton said. “School jobs used to be bid as smaller packages, now they bid as $30 to $40 million projects and use a CM to handle it.”

He said more use of alternative delivery systems such as design-build and CM has been good for the industry.

Doster agreed, “The owner requiring a presentation of selected contractors and getting into what personnel that contractor’s going to use and what expertise that contractor has in this owner’s particular project, that absolutely gives the owner a higher quality job.”

Labor conditions change, project delivery systems change, leaders in the industry come and go. And yet Birmingham’s construction industry moves steadily forward.

“I think it continues to grow because of the environment here,” Stuart said. “It raises the bar. If you are derelict you are not going to last long. There are too many good contractors around here. You have to do well.

“Of all the places we work, Birmingham is great. The competition is keener, there are better contractors here, a better workforce here. There are better architects and engineers here. The environment in construction is hard to beat,” he said.