By James Overstreet (Contact), Memphis Commercial Appeal
Sunday, August 16, 2009

 While many economists, pundits and politicians have declared an end to the Great Recession, the construction industry isn't feeling it yet.  But that's not unusual, because commercial construction typically lags economic recovery by several months -- if not years, says Associated Builders and Contractors chief economist Anirban Basu.  The organization recently unveiled a new economic report called the Construction Backlog Indicator, which will be released every other month.

 

"Contractors always talk about their backlog as a means to answer the question, 'How's business? “says Mike Carpenter, president and CEO of the West Tennessee chapter of ABC. "The CBI is a natural measure to determine how robust (or not) this industry is."What the CBI shows is very consistent with what we are experiencing locally -- a declining backlog," Carpenter says. "This also meshes with what local architects are telling us about their backlog or lack of backlog."  ABC has been projecting recovery for its industry in mid- or late 2010, and the new CBI report supports that prediction.

"This is in contrast to residential construction and the real estate market, which appear to be showing signs of a slight recovery," Carpenter says. "Commercial construction is always on the back end of a downturn and a recovery."  Basu points out that the full benefits of the economic stimulus package haven't been felt yet in the construction trades.  "We had a very good sense that shovel ready didn't mean immediately ready," Basu says, referring to the stimulus bills' advocates who claimed the money would be immediately injected into the economy. "Projects needed to be planned and bid out. It takes time before they are converted into contractual obligations."  However, many construction companies will not get a piece of the stimulus-related projects, and their backlogs continue to decline.  "Many segments of commercial real estate remain in very bad shape," Basu says. "There is a general lack of financing and job losses lead to decreasing office, retail and hotel occupancy rates. None of that helps construction. So although many economists are calling the recession over, the commercial real estate industry has many more months -- probably years -- before it recovers."

 

As the Apple Store at 7615 W. Farmington at Saddle Creek in Germantown closes for renovations until Sept. 3, local Macintosh dealers are seeing a welcomed increase in business.  "Our business has been up about 25 percent already," said Jim Walton, co-founder of 31-year-old Computerlab of Memphis Inc.  Computerlab, at 685 N. Mendenhall in East Memphis, is one of several companies filling the void. Another is MacAdvantage at 1000 Reddoch Cove. MacAdvantage has been a seller of new and refurbished Apple computers, accessories and equipment for more than 15 years.  It has been awarded the Apple Authorized Service Commitment to Excellence Recognition award for all four quarters of 2008 and the first two quarters of 2009 -- the only company within Tennessee, Mississippi, Georgia and Kentucky to accomplish that feat.  "We have parts here that you can't even find on the Internet," says Mignonne Wright.  Securas Consulating Group is also accepting Apple laptops and desktops at its facility at 1125 Schilling Blvd., Suite 101, in Collierville, beginning Monday. Securas Consulating is also extending its hours from 9 a.m. to 7 p.m. Mondays through Saturdays and noon to 6 p.m. on Sundays.