God Bless Us Everyone

The Tanger Outlet Center in Mebane provided an economic boost at about the time Ace/Avant Concrete Construction needed it most. In fact, when Tanger officials broke ground for the massive shopping facility last year, the construction industry in the state was at its lowest point in recent history. The Mebane project was the largest of its kind in North Carolina in 2010, the Department of Commerce said earlier this year.
For Ace/Avant Concrete Construction, of Archdale, the contract it received from Tanger saved 10 to 15 jobs.

"It means many more families get to put food on the table," said Tracy Matson, president of Ace/ Avant. "It was wonderful timing to have that project."
Numbers back up Matson's assessment. According to the Associated General Contractors of America, unemployment in the construction industry is soaring at 17.3 percent, far higher than the national jobless rate, which is 9.6 percent. The industry is losing jobs while the nation as a whole is seeing gains in employment.

Sales were down by about 50 percent since 2007 for Ace/ Avant before the Tanger project came up. It helped that number look better. Now, the reduction in sales since the recession began is 20 percent.
Greg Lilly, associate professor of economics at Elon University, said that the Tanger project was a unique phenomenon for the state the economy was in.

"Commercial and housing construction gets hit the hardest during a recession," Lilly said. "Banks haven't been open with mortgage financing because of consumer debt issues."

According to McGraw Hill Construction, which provides industry news, market research and industry trends and forecasts, commercial building declined by 62 percent, in dollar value, over the last three years.

By 2012, it's been predicted that half of all companies will be out of business, Matson said. "We don't plan on being one of them." The Atlantic Building Group of Garner, which carried out brick work and other masonry for Tanger, almost closed its doors for business before the project came along.

"The Tanger Project did help out for sure," said Tom Migliaccio, a co-owner of Atlantic.
In 2008, Atlantic's sales were above $3 million, but it began feeling the squeeze in the middle of the year. In 2009 they were below $1 million.

"When you go under $2 million, it's a red light," Migliaccio said. "A million is not very much for a small business." Payroll, taxes and other overhead and expenses have to be paid from that money. "Things add up," he said. Another big concern for Atlantic was delayed payments for work it had already completed, sometimes waiting a month for the check to come in. Ace/ Avant had to endure several delayed or cancelled projects, because of economic conditions. But the Tanger project kept at least 25 of its 120 employees busy for six months. "It's very seldom that you have a project of this size," Matson said. "We have never done a retail project of this size." Most of the retail projects Ace/Avant takes on are smaller, such as for Target or for Wal-Mart. In the last 15 years mall projects completely dried up, Matson said. "Hopefully Tanger will build more malls."

Private commercial building has also dried up, Migliaccio said. Most of the work he sees is government, hotels, military, schools and churches. Some of this is because of the stimulus package, which is focused on infrastructure.

"Local stimulus dollars certainly did not hurt. The question is just how much of a benefit was it?" Lilly said.
McGraw Hill Construction predicts 8 percent growth in construction for 2011 with commercial building increasing by 16 percent for the year.

"As the economy rebounds, that's part of the recovery process, more major construction projects will return," Lilly said. "We are still fighting our way out of a recession."

SOURCE: iStockAnalyst