Within earshot of O&G Industries”™ concrete production plant in Stamford”™s South End, steel soars skyward behind Jersey barriers as two new office buildings take shape on their foundations.
As federal funding from the American Recovery and Reinvestment Act trickles into state and municipal agencies, at least one local sees the foundation being poured for the next business cycle.
Meet Jill Zhang, in some ways the very face of the economic recovery. When orders begin pouring back into her Stamford-based Sysdyne Corp. software company, you can take it as set in stone that capital is flowing again in the economy.
Concrete producers like Torrington-based O&G use Sysdyne”™s software to compute how much concrete they dispatch to customer sites, allowing them to save money by more closely correlating production, sales and inventory. One Sysdyne customer cut a purchase order from three software licenses to one on the eve of the Wall Street collapse, Zhang said, providing her a preview of what was to come. When those two licenses are on order again, Zhang will know that the concrete is flowing in abundance once more ”“ and by extension, the local economy is humming.
At the World of Concrete trade show in Las Vegas this February, Zhang compared notes with fellow vendors that supply products and services to the concrete industry, which economists closely track as a bellwether of the construction industry. She is still stunned by the swiftness of the industry”™s collapse beginning 18 months ago.
“I had a very good 2006 (and) 2007,” Zhang said. “In September 2007, orders stopped coming. I said, ”˜What”™s going on?”™”
That was a legitimate question to ask in the fall of 2007, with the specter of a housing crisis in view, but Fairfield County employment still growing and few seeing the dire effects it would have on the world economy.
While Connecticut”™s construction industry had 19,000 fewer jobs in February than a year earlier, many feel the sector was spared a worse contraction due to high construction costs locally that had discouraged some developers from breaking ground on projects.
As of January, Stamford area builders continued to pay among highest premiums for construction in the nation, according to Reed Construction Data, shelling out 12 percent more than the national average for everything from concrete to labor. The study suggested that Stamford builders saw construction costs soar 8 percent from a year earlier, among the half-dozen highest inflation rates in the nation for builders.
Incredibly, Stamford was the only city in the nation to fall within the top 10 for both construction costs and inflation on the Reed Construction Data survey, though costs dropped 2.5 percent between October 2008 and January, among the more dramatic drops in the nation.
New York City builders continue to shoulder the highest costs, with builders there paying 30 percent above the national average for materials and labor; and Las Vegas has seen the steepest inflation on a year-over-year basis.
The U.S. Census Bureau reduced this month earlier estimates for commercial construction nationally in February, citing delays by private developers in accessing continued financing for projects on the brink of breaking ground; and from property owners nervous about future rent collections from current or prospective tenants.
In New York City, a number of developers reportedly have demanded that unions accept wage cuts before continuing projects already begun.
That is occurring even as the cost of steel and other raw materials drops as lower oil prices make it cheaper to ship commodities, and as demand falls in China.
Zhang hails from China herself and visited last summer for the Olympic Games, taking in the 1,500-meter run among other events.
If the current recession is not quite as short as the metric mile, Zhang doesn”™t believe it will be a marathon either. In expectation of the next economic upturn, her Sysdyne recently debuted a Web-dispatching system called ConcreteGo.com, which can be accessed from a Blackberry and other mobile devices.
