Regional construction sector remains mired in slowdown

The construction landscape for the coming year in northern Nevada shouldn't be much different than past few years, with regional contractors hard-pressed to find work and profits close to home.

John Madole, executive director of the Nevada Chapter Associated General Contractors, says 2013 will look much like 2012 and prior years bleak.

"I think 2013 looks like very difficult year, and I don't think it will be any less positive than 2012 was," Madole says.

The AGC represents construction firms that primarily do large public works, commercial and highway projects. Much of the problem stems from drastically reduced funding for those types of work, Madole says.

"If you were to compare public works budgets five or six year ago, the state total was between $700 million and $800 million for the coming biennium. Now we are talking about $50 million a year it is a fraction of what we were spending a few years ago. You have got less work, the bidding is very competitive, and profit margins are very thin," he says.

Madole says the AGC will be closely watching the legislative session that begins on Feb. 4 to see if funding will be allocated for a backlog of public works projects, primarily in infrastructure maintenance and repair throughout the Truckee Meadows. The state could get a host of those projects completed at substantial discount from prior years from contractors willing to take less profits to garner work, Madole says.

Those projects are going to get more costly as time goes on, adds Rod Cooper, Nevada regional manager for Granite Construction.

"Our quality of life and commerce benefits from an efficient and maintained infrastructure," Cooper says. "Proper planning is the most cost-efficient means to manage our infrastructure system, and our state certainly needs to prepare for it."

The northern Nevada division of Granite Construction was one of the busier firms in 2012, landing the $72 million project to improve Interstate 80 from Robb Drive in Reno to Vista Boulevard in Sparks. The company will be working primarily in rural Nevada in 2013, says Nevada Regional Manager Rod Cooper.

Granite has large projects in Ely and Winnemucca, Cooper says, as well as on Highway 50 in Dayton. Beyond that, though, the company's calendar is a little too open.

"Unfortunately, there are not many 'big' projects on the slate for next year in northern Nevada," Cooper says. "There are some possible opportunities in Las Vegas, but funding throughout the state seems to be tenuous."

Jarrett Rosenau, senior project manager for Clark and Sullivan Construction, says the volume of work on the horizon certainly "is not enough to feed everyone that is out there."

The best the region has to offer, Rosenau says, is small pockets of activity, such as minor school renovation projects and routine seasonal roadway improvement work.

Michael Russell, chief operating officer of United Construction, says there will be modest activity in the region for 2013, but it should take several more years to get back to a reasonable level of construction activity in the Truckee Meadows.

Construction in the Truckee Meadows is not all bad, though. Among the bright spots: the construction of a huge data center by Apple, and initial bridgework for the Southeast Connector in east Sparks. The City of Reno also has some critical sewer work, Madole says, part of the city's 10- to 15-year plan to upgrade the region's sewer system.

"Beyond that there just are not a lot of bright spots," Madole says.

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What to watch in 2013

The State Legislature. One proposed bill in particular could could generate between 25,000 to 28,000 construction jobs for maintaining and repairing public facilities, says Nevada Chapter AGC executive director John Madole.