For the construction industry, contraction and new opportunities
By John Early
Published: December 31, 2008
It goes something like this:
"You guys busy?"
"Not really. How about you?"
"We've got a few things going. You hear of anything?"
"A lot of stuff being put on hold. I heard John had a big one cancelled after they dug the hole and poured the footings. You going to need help with anything? We have a six-man crew"
"I'll let you know if we do."
And so goes the Dance of the Contractors, performed daily throughout Martha's Vineyard at the lumber yards, the restaurants and coffee shops, the banks and the job sites, trying to extract as much information as possible while giving up as little as possible.
File photo by Ralph Stewart
The crisis that has decimated the financial markets and put the future of many of our industries and institutions in doubt is having a profound effect on that sector of our local economy once thought to be nearly recession-proof: homebuilding. For years the engine of residential construction, arguably the most reliable component of the local economy, has chugged along in a comfortable sellers' market. Contractors had projects lined up months and even years ahead. Subcontractors were also stretched pretty thin, and their whereabouts was often the object of speculation. One of my subs would frequently ask me, "which one of your jobs do you want me to go to today?" There was lots of work and not enough people to do it, but all of that has changed and changed quickly. The backlog is in the fire.
There is a great deal more to building houses on Martha's Vineyard than what is happening on the job site. There are the architects and engineers who design the sewage disposal systems and the landscaping as well as the houses; the plumbing and electrical supply companies; the paint and carpet stores; the trucking companies; the inspectors; the caretakers and the maintenance people. And there are the hundreds of carpenters, masons, roofers, shinglers, plumbers, electricians, plasterers, painters, cabinetmakers, landscapers and other essential trades people who have, until fairly recently, been able to depend on the 40-hour week and the paycheck that goes along with it.
Unlike some of the more seasonal enterprises that concentrate on a relatively narrow window of opportunity for their livelihood, the construction industry has acted like an economic flywheel, providing well-paid, year-round employment and stability to a significant percentage of our population. Accurate information is elusive, but the weekly payroll of just those workers directly involved in residential construction in a healthy economy must be in excess of $10 million - more than $500 million dollars a year. Year after year. When that fundamental sector of the Martha's Vineyard economy starts to break down, the ripple effect is rapid and widespread.
The heart of the Martha's Vineyard building industry has historically been the "second home" or "seasonal residence" market, and it has suffered a direct hit from the current disaster in the financial world. Projects have been stopped, reduced, revised and put on hold, certainly an understandable response from people who have just watched their net worth evaporate, seemingly in the blink of an eye. This clientele has been very, very good to Martha's Vineyard, requiring little in the way of municipal services (education, public safety, recreational facilities, etc.) while supporting our towns, institutions, and charities with their hefty real estate taxes and philanthropic generosity.
Now is probably not the time to suggest that economic stimulus begins at home (or at the second home). One client told me that he would not do anything until we hit the bottom, or at least until he knows where the bottom is.
But whether the work has been cancelled, deferred, scaled back, postponed or delayed, the immediate result is the same. A large segment of the working population of Martha's Vineyard will be bringing home considerably less money with which to feed, shelter, clothe, and educate their families in an area that already struggles with one of the of the highest costs of living in the country. So, what are we going to do while this mess gets straightened out?
Some of us will sadly but certainly be forced to leave Martha's Vineyard, driven away by layoffs, unemployment, and foreclosure. Others will develop new job skills and move into entirely different fields, perhaps Internet-based business that can be pursued from any location with a decent phone connection. But a great many of us will probably try to ride it out, and there may be a few silver linings to be considered. I am told that the Chinese use the same character in their written language for "danger" and "opportunity."
The danger is fairly clear, the opportunities somewhat less so.
One of the great resources of Martha's Vineyard that is often taken for granted is an extraordinarily skilled labor force. The level of craftsmanship in all of the trades is quite remarkable, and there is virtually nothing made of wood, metal, concrete, or stone that cannot be built on Martha's Vineyard. One possible area of opportunity is maintenance, both routine and deferred. In these uncertain times it would seem that many people would be more inclined to make regular, modest investments to protect an existing asset than to incur the large expense of creating a new one. There are a lot of buildings, in both the public and private sectors that could use some attention. All of those small projects that have been impossible to get done over the years are suddenly going to be much more attractive.
It is not unreasonable to assume that our government, at all levels, will continue to try to spend its way out of this predicament. Could it be possible that federal and state funding might become available for something that we really need? Like affordable housing.
Perhaps we can find a way to apply our greatest asset to our greatest need, by enabling our skilled workers to participate in the construction, renovation, and rehabilitation of decent and safe housing for persons of low and moderate income.
By the way, history indicates that many of the original homes on Martha's Vineyard were built during the economically precarious times of the 1930s and the late 1800s. I'll bet that a lot of them could use some maintenance.
John Early, for many years a West Tisbury selectman and member of the Martha's Vineyard Commission, runs the construction company that bears his name.
