Firms working in commercial construction in Southern Utah have been scrambling the past 18 months to stay afloat during brutal economic times.
“We’re still doing work, but construction is a tough business to be in right now,” says Doug Watts, president of St. George, Utah-based Watts Construction. “We’re doing what we can to ride out the storm and keep our people working.”
Public works and municipal projects are virtually the only commercial type of activity currently going on in Southern Utah, and all signs point to that trend continuing.
“It’s obviously a tough time for pretty much anybody working in the construction industry,” says Owen Olsen, district manager for the Associated General Contractors of Utah. “Highway and infrastructure projects are doing well, but the building side is definitely struggling.”
Olsen says there is a glut of open office and industrial space, which makes it unlikely new projects will be built in those areas.
“It’s hard to be optimistic when the economy is in this condition, but we’re trying to stay positive and hopeful that things will turn around,” adds Rich Thorn, president/CEO of the AGC of Utah. “Unfortunately, commercial construction follows the trend of the housing market.”
Olsen says his membership has dipped more than 30% in the past year. “Half of the members we’ve lost have gone out of business, mostly subcontractors,” he says. “A lot of them, if they’re not out of business yet, they’re on their last lifeline.”
Major infrastructure projects—including the new St. George Airport and highway-related work such as the Southern Parkway in St. George, SR-9 widening in Hurricane and Valley View Bridge just north of St. George—are keeping some firms busy.
“These (infrastructure) projects will definitely have a positive impact on the future economy of Southern Utah,” says Mike Davies, a project manager for Draper, Utah-based Wadsworth Bros. Construction, which has a satellite office in St. George.
Wadsworth Bros. recently completed the $38-million Atkinville Interchange on Interstate 15 just south of St. George and is building the nearly $4-million Valley View Bridge.
“We are overbuilt in every area on the commercial side,” says Allan Carter, director of developer services for Southern Utah Title Co. of St. George. “Industrial is the worst right now, but the office market is not far behind. We’re seeing a drastic reduction in commercial (lease) rates across the board.
“Private development is dead. I hate to use that term, but banks making those (commercial construction) loans are also foreclosing on homes. The guys waiting to build an office building or a strip mall or motel, they’re going to have to wait until the economy rebounds.”
Fortunately, public projects like the new St. George Airport are keeping some contractors busy. The airport project is critical for the future growth of Southern Utah, says Brad Kitchen, a project manager who closely monitors the $168-million project for the city of St. George.
The new airport is situated in a 12,000-acre area about 10 miles southeast of St. George and offers much more space than the current airport, which sits on 250 acres on the top of a bluff overlooking the city. Kitchen says the...