Heritage Restoration, Inc.

The State of The Construction Industry

The Rhode Island construction industry is changing and not for the best.  This is not a political statement, or some in-depth economic study, rather it is a based on industry chatter and observations.  There are some ongoing trends threatening the industry’s vibrancy, that having adverse effects on project costs, our economy, and our future. But there is hope, and we may have it right here in little Rhode.

I have had many conversations with professionals who have never seen an industry depression like this in 40 years.  These amazing craftspeople care about what they do and the future of the craft.  Like Dan who worked at Brown and Sharpe for years and now works with his son manufacturing point of purchase displays.  Dan has an eye for detail and an ability to figure out any problem like few I have met.  Or Andy, a phenomenal architectural sheet metal craftsman taught by the same people who built Providence at the turn of the 20th century, or George, a local renowned blacksmith who both cannot find good workers. The biggest concern: losing craft skills from people who leave the industry from a lack of skilled work and no one to pass the knowledge to.

The industry went from OK to bad in 7 years.  There was a 70% drop in RI permits pulled (US Census Bureau) from 2005 to 2013.  The manufacturing that once was the backbone of the RI economy is slow to come back, if ever.  And without a thriving business environment, unemployment is the worst in the country.  The result: fewer contractors and work.

If you want to know how many less contractors and workers, just look at the statistics.  The first 3 years of the Rhode Island Contractor’s Registration Board’s existence from 1990-1993, 6,700 companies were registered.  Since then, about 31,000 contractors have registered, but only 7,200 remain valid.  About 30% more surrendered their registration from 2008-2014 than from 2001-2007.  RI construction employment has dropped from 22,700 in 2006 to 16,200 in 2013 (Department of Labor).

This 7-year period has seen a lot of pain.  The rhythm of work has been inconsistent; a bad thing for trades people who are happiest keeping busy (just ask their partners).  The quality and longevity of work has been lackluster, stealing their soul and profit.  Many older crafts people have closed shop, walked away or found new careers. Those who remain hang on for better times. The dragging economy has demoralized the craft, leaving many gaps and shrinking options. But Rhode Island was not always this way.

Richard Greenwood’s article “Providence One Hundred Years Ago – The Industrial Heyday” on the City of Providence’s website, states Providence employed more than 46,000 worked in over 1,000 manufacturing establishments in 1910.  The article goes on the say “open land was soon overlaid by the expanding grids of city streets and the building trades flourished as carpenters, masons, plumbers and painters provided housing for the workers, middle class and wealthy.” In 1910, Providence was the 20th largest US city with 224,326 residents.  In 2012, Providence had 178,432 residents. The volume of construction activity coupled with an unprecedented manufacturing of local building parts created a depth in expertise and creativity to serve the building industry.  Manufacturing provided for workers income security, which then fed back locally made materials and manufactured goods.  The amount of remaining late 19th and early 20th century spectacular buildings is awesome. Few argue the correlation between the vibrancy of the trades, the economy, and security of workers.


Why bring this up?

The construction industry pretty much bottomed out about a year ago.  The climb out has been very, very slow.  Many contractors charged as little as possible to stay in business; doing whatever it took to keep busy.  For many it kept them afloat, while others didn’t make it.

Big box suppliers continue to flood the market with cheap, outsourced materials and manufactured goods.  Buying local has become more popular, with Rhode Island seeing more and more farmer’s markets, locally crafted wines and beer, and other crafts sold by local merchants.  Not only does buying local help local craftspeople, but many of these crafts are a much higher quality.  Items such as furniture and built-in cabinets, doors, windows, and locally sourced, cut, and milled wood keep things local, and spur more economic activity.

The good news is the past few months are busier than year’s past.  This is good, although a smaller workforce, less competition, little inventory, rising interest rates, and historically low profit margins may result in some higher costs.  But don’t be discouraged; the contractors that survived are eager to work.

The point is when you start to think again replacing your tired kitchen, a new roof, or painting the house, you have choices.  You can pick the best contractor for the best price.  You can also drive past the big box store right to the local craftsperson’s shop.



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