The good news for owners who are bidding their work is that there are more companies bidding for that work. One example of that is shown in a news video posted yesterday by WSAZ/NewsChannel3 in Huntington, West Virginia about a renovation and repurposing of a building in the Cabell County School District. They have been flooded by bids for the job. They received about 4 times as many bids as they expected for the demolition portion of the project alone.
In this case, a local firm won a bid over larger national and regional firms who are looking for work anywhere they can find it. That is good news for the local firm, but bad for the other firms.
The bad news is that the expansion of the number of bidders and rising costs for fuel and building materials are cutting into any margins that the winning firms expected from the projects they bid.
The really ugly thing is that there are not enough active projects out there and the unemployment in the construction industry is still over 20% in most regions of the country. That is not good for the industry or the economy as a whole. The economic recovery is underway and, as we have said before, we are on the bottom of the economic river. The key is determining how wide that bottom is before we are able to reach the other bank and regain the job losses that we suffered in the downturn.
The good news is that the design firms have reported that their activity has been improving for the last two quarters and that usually means that construction activity is not too far behind.