Subcontractors Seeing Start of Slowdown

To many contractors, the past two months are like re-living 9/11 all over again.
No one saw the current economic implosion. Even in September, with a steady diet of negative market reports, most businesses expected to weather the turbulent times.
Even during October, when the bottom fell out of the market — the first time — area contractors were not overly concerned.
But beginning around the end of November, business owners hit a brick wall.
“People are getting quite conservative at the moment,” said Joel Kinsch, owner and president of Elite Service, 10007 E. 59th St. “A year ago at this time, people were replacing systems that as they came due. If a part failed and the system was old, they would replace it.”
Today, customers are replacing the aging part but not an entire heating and air system.
“Our replacement sales have decreased,” Kinsch said. “October was an average month for us. November not too awful bad. But by Thanksgiving, sales had dropped, even with hefty promotions.”
Customers are holding back because they do not know what is going to happen, Kinsch said.
“People have to replace their heat and air but they are not making major placements,” he said.
Government, School Construction
At the same time, government and school building projects are keeping local contractors occupied, said Bart Colburn, president of Colburn Electric, 829 W. Elgin St. in Broken Arrow,
“We are just as busy now as we were a year ago,” he said.
“I know we are supposed to be in a recession, but we look at engineers and architects for a good idea of what’s ahead,” he said. “If they are busy that is a good indicator of business eight to nine months out there.”
Electrical work across the state appears steady as cities and school districts complete projects started within the past year. Colburn continues to expand and hire.
“It is statewide,” Colburn said. “We have stuff as far south as Wilberton. There is a lot of wastewater projects, too.” Colburn has an Oklahoma City office and performs work in Stillwater.
Colburn is seeing more out-of-state contractors bidding on Oklahoma projects.
“They are migrating this way,” he said.
Darrel Loker, president of Commercial Wallboard, 20205 E. 74th Place in Owasso, agrees, saying out-of-state-drywall contractors are “coming out of the woodwork.”
“They are coming from all the states around us, bidding on everything here,” Loker said.
Drywall work is good for another six months, “all that has been on the books right now.”
“It is pretty slow,” he said.
J.T. Cogburn, co-owner of Cjc Connections with wife Carol, said his business is down 40 percent from a year ago.
The company, at 6998 S. 145th East Ave., has been in about 35 years.
“We still are going to do our share of work. In Tulsa, you are going where-ever the builders go,” Cogburn said. “Whatever the real estate people do, everyone follows.”
It is a tough time now, partly due to the past five years when Tulsa experienced a building boom. Today, 2007 is ranked as the best year ever and now is the base year by which others are measured.
“The National Homebuilders say it will be down until May then pick up,” Cogburn said. “It may be until 2012 or 2013 before we see ‘07 levels,” he said.

Back Logs
Meanwhile, Mike Jones, president and owner of M.L. Jones Acoustics Inc. 8 S. 111th East Ave. has a backlog through the third quarter.
“We are seeing a large amount of work to bid. But, we are also seeing competition from out-of-state contractors,” he said. “More people are going after the same piece of pie.”

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