News Articles and Press Releases

5/12/2009

Construction companies feel optimistic that economy will improve

"It’s always darkest before the dawn.”

That’s what Ringland-Johnson Construction owner and President Brent Johnson said about the construction industry and the economy in general. His company is looking for any work it can find around the state to weather the economic storm.

Ringland-Johnson has been in business since 1946. Founded in Des Moines, Iowa, the company has its offices at 1725 Huntwood Drive, Cherry Valley. Ringland-Johnson Construction is a commercial General Contractor, specializing in Design-Build and Construction Management in the central United States. The company also offers design services through its affiliate company, Ringland-Johnson+design, Inc. and complete land development services are offered through Genesis Land Development and Brokerage, LLC.

In 2008 Ringland-Johnson had a record year of growth. Its 246 employees were focusing on the construction of aerospace and health care facilities. One of its main projects was the newly constructed OSF Center for Health - Rock Cut on Route 173 in Machesney Park.

Only a few months ago Ringland-Johnson was pursuing projects with Woodward Governor in Rockton, Swedish American Hospital in Rockford, Freeport Health Network, Mercy Health System in Harvard, Ill. and Exelon Nuclear plants around Illinois.

In January of this year, however, most of Ringland-Johnson’s clients put their projects on hold. That, combined with overall economic conditions, forced the company to drop down to only 42 employees.

“We’ve fallen off a cliff,” Mr. Johnson said. “We’ve had to significantly cut back our professional staff and workforce. We laid off over 200 people. Each has a family and is important to me. It is not a good time for construction.”

However, Mr. Johnson sees the tough year as only a temporary situation. To get through it the company is shifting and adapting to pursue government work. The only problem is that there isn’t much government work available in Rockford.

So Ringland-Johnson is traveling around Illinois to pursue work at the University of Illinois in Champaign and Illinois State University in Bloomington.

“There are government projects out there. We need to pursue them where they are spending money,” he said.

Mr. Johnson admits the Stimulus Package, however, has been a little disappointing. At first it sounded like it would include lots of building projects in Illinois, but those amounts were later reduced. Although some of road projects stayed in the package, they weren’t a great benefit to Ringland-Johnson, a company focusing on commercial building construction.

One bright spot was education projects coming to Illinois. However, Johnson said the state decided to use stimulus dollars for operational expenses instead of building K-12 school projects.

“The stimulus is helping school districts avoid bankruptcy,” Mr. Johnson said. “The building industry in Illinois has very little stimulus money coming to it.”

One of the few available projects in Rockford is the Rockford Airport, a $1 million project. He said his company is about one of 10 companies competing for it.

The Chicago market doesn’t make a lot of sense for Ringland-Johnson right now. Although there are some stimulus projects available such as veteran’s affairs medical clinics and a U.S. Navy base, there are big Chicago companies competing for them.

“They don’t have as much work so they are chasing a small pool of projects. Our ability to compete there would be almost non-existent,” Mr. Johnson said.

He added that the stimulus package tends to focus on big companies in big cities.

“It’s up to the rest of us to fend for ourselves,” Mr. Johnson said.

Mr. Johnson, however, does hold out hope for a proposed capital plan, which State Sen. Dave Syverson has been working on. And the mini-stimulus capital plan, passed on April 2, had $3 billion earmarked for surface road work to go to bid in the next 60 days.

Because the projects were targeting only road and bridge work, Sen. Syverson said he is working to add on a full blown capital plan, which would total around $15 billion. It would include money for new construction projects. In the Stateline Area that could include Rock Valley College, Northern Illinois University and others.

"I'm so frustrated that President Barack Obama doesn't seem to get how the economy works. It works best when you build things. If we put more money into programs that build things we would have stimulated the economy much better. When you build a new classroom building at a university, for example, not only is a contractor going to work, but you also have architects and various suppliers who will work," Sen. Syverson said.

Despite the challenges, Mr. Johnson said he’s an optimist and said by this fall the economy will hopefully pick up. Although companies will hold out about six to 12 months before they return to their building projects, Johnson said things will return to normal again.