Diversification isn’t merely an important business consideration for local construction companies as they ride out the recession – it’s key to survival.
“One of the things we have done to combat the recession is to focus more on service work and to start our Huff Restoration DKI division, which does fire, water and other emergency service work along with the rebuild work that typically is needed to restore damaged properties,” said Gary Huff, chief executive officer of Huff Construction Co. Inc. in Modesto.
“We are currently doing projects of many kinds, from industrial to medical and a little of everything in between,” Huff said.
“The ratio of tenant improvements and remodel work to new construction is higher, due to the recession,” he explained. “The industrial sector of new construction is probably the least affected by the recession.”
Bob Leonard, owner of Bob Leonard and Associates in Stockton and Ripon, estimated that at least 80 percent of his business involves remodeling and about 20 percent involves restoration.
“We always did remodeling and restoration – everything from water damage to structural damage,” said Leonard, whose business survived 2010 and 2011 thanks to two large commercial remodeling projects.
Currently, clients are requesting kitchen projects and upgrades of all sorts, Leonard said.
“Work picked up because people who weren’t under water decided they would stay where they are and make improvements,” he said.
While Diede Construction, Inc. in Lodi has always been diversified, it has expanded that philosophy throughout the current recession, said John Anderson.
“Part of diversification involves identifying voids and pulling them in as new services,” Anderson said.
“We never thought of doing this in 2007,” Anderson said. “Today, we are participating in partnerships with foreign firms and individuals developing projects that include assisted living, medical, and entertainment.”
These days there are also more opportunities for contractors to increase their skills, such as the Restoration Contractors Symposium about codes and compliance, scheduled for March 31 in Ceres.
Although construction in the private sector is still struggling to move forward because so many empty offices and warehouses are still available, Anderson said that the call for construction at public work sites – such as municipalities, county, state and federal projects – has not slowed down, and has even been assisted by federal government programs.
“We never stopped doing modernization of schools,” Anderson said. “We have continued to have substantial growth in design-build projects serving both public and private sectors clients.”
Streamlining has been an essential part of the process, Anderson added.
“Finding ways to save costs and reduce overhead has been a key component to our surviving the recession,” he said. “And while before the recession, contractors would look at jobs in a 50- to 75-mile radius from their bases, we are currently working in multiple states now and licensed in Nevada, Washington, Idaho, and Hawaii, and soon in Arizona and Oregon.”
Diversification, along with an emphasis on customer service and safety, has been a successful strategy for W.L. Butler Construction, Inc. in Stockton.
“We’ve always been diversified, but we’ve continued to develop so we don’t depend on one sector,” said David Bayliss, business development manager.
“While we haven’t added any new market sectors, there are sectors that have seen a dramatic swing in the past three years as a reflection of the economy,” Bayliss said. “Today, we see significantly more medical, retail, banking, automotive and office projects – all private client work – whereas a year ago there were no real leading sectors and we were looking at a mix of public and private work. In particular the retail, banking and auto industries, which were some of the first sectors affected by the economy, have now rebounded.”
Bayliss added, “The type of work we see going on, regardless of sector, involves people looking to make their projects and facilities as efficient and sustainable as possible, green building, and incorporating materials and products that reduce operating expenses.”
Bayliss favors a conservative outlook for the construction industry in 2012.
“We think it’s probably going to be similar to 2011 – which was a good year for us and reversed the trend of reduced revenue – with the potential for some growth,” Bayliss said. “If you look at what’s going on in the Central Valley, there are a number of incredibly large-scale infrastructure projects that will help improve our area as a business environment. But while there are more opportunities compared to previous years, competition in the industry is stiff and I don’t think we’ll see many ground-up projects until the second half of 2013 and into 2014.”
Here are 10 tips offered by the
California Contractors State License Board for making sure your contractor measures up:
• Hire only licensed contractors.
• Check a contractor’s license number online at www.cslb.ca.gov or by calling (800) 321-CSLB (2752).
• Get at least three bids.
• Get three references from each bidder and review past work in person.
• Make sure all project expectations are in writing and only sign the contract if you completely understand the terms.
• Confirm that the contractor has workers’ compensation insurance for employees.
• Never pay more than 10 percent down or $1,000, whichever is less.
• Don’t pay in cash.
• Don’t let payments get ahead of the work.
• Keep a job file of all papers relating to your project, including all payments.
• Don’t make the final payment until you’re satisfied with the job.
Visit the websites of the firms mentioned:
Huff Construction at huffcon.com; Bob Leonard & Associates at bob-leonard.com; Diede Construction at diedeconstruction.com; W.L. Butler Construction at wlbutler.com; email the Restoration Contractors Symposium at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
