Construction firms forecast uptick in 2014

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As a new year unfolds, construction companies say that they will not let the ball drop on commercial projects started in 2013 and are speculating on trends that will carry over into 2014.

“I think it will be a positive year. We saw some pickup in 2013,” said Kevin Serfass, vice president of Serfass Construction Co. Inc. in North Whitehall Township. “The Lehigh Valley in general is busy, especially with commercial growth in manufacturing and health care.

“Businesses are starting to reinvest capital again, and we have more new projects being built from the ground up.”

Like so many others in the Greater Lehigh Valley’s construction industry, Serfass said that clients who were hesitant to build new in the last few years are feeling confident enough to dig in the ground and embark on fresh projects.

Construction firms polled reported that in the last couple of years, clients carefully selected their projects. They chose to make renovations, additions and upgrades to existing facilities versus hammering out deals involving new construction.

Serfass, who anticipates more large-scale commercial ventures in 2014, said that health care projects are still big for his firm, just as they were in the downturn. One nice trend he said he sees is that retail construction, which was put on the back burner for the last few years, is picking up steam.

“Our firm has done very well. We had a record year in volume and steady growth. Since 2009, we grew 300 percent, even in a hard market. We were aggressive and it worked for us,” Serfass said.

Mike Ondra, CEO of Ondra-Huyett Associates Inc. in Upper Macungie Township, agreed with Serfass that things are looking up regarding construction ventures in 2014. He said he also sees growth in the retail market.

“Year over year, the construction marketplace returned fairly well in 2013, and it is already shaping up to be a strong year for construction this year,” Ondra said.

Boyle Construction Management in South Whitehall, the construction firm that had a hand in renovating the Crayola Experience in Easton, also had a prosperous year in 2013 and expects several ongoing projects to conclude in 2014.

“Personally, for us, it has been a little more diverse than previous years. We have a lot of restaurants, offices, health care projects, township work and manufacturing buildings,” said Sean Boyle, president of Boyle Construction. “There has definitely been more activity in the last six months, and we expect that to continue in 2014.”

While construction firms say that new construction is gaining momentum, renovations and additions to existing buildings have not halted.

“Not much was happening two years ago. So we have a backlog from that with quite a bit of inventory on real estate. Now, businesses are putting money into investments and using buildings already standing to do it,” Boyle said.

Boyle said the use of existing buildings will carry on for companies that want to make a quick turnaround on investments. When a company decides to build new, it is a time-consuming process with months, and often years, of trying to get approvals, drafting proposals and working out zoning and permitting issues.

As an overall trend, “most of our projects are single-story buildings. There are not many taller buildings being planned, except for some work we have in the City of Allentown and Bethlehem,” Boyle added.

At Ondra-Huyett, Mike Ondra also sees more single-story facilities than towering skyscrapers. The firm is working on taller buildings in downtown Allentown, but, for the most part, office buildings and manufacturing plants in industrial parks are taking up more of Ondra-Huyett’s time and manpower.

“There will still be considerable renovation to existing buildings and upgrades to facilities,” Ondra said. “The health care market will be strong, as it has been, and similarly, we are getting lots of work in the higher education at colleges and universities.”

Martin Till, regional president of New Jersey-based J.G. Petrucci Co. Inc., which has a Bethlehem office, said the firm is involved with projects on college campuses, specifically a dorm project that will add 300 bedrooms at a college in eastern Pennsylvania.

According to Till, new construction ventures were at the forefront last year, and this situation will only improve in 2014. Several projects are still in the planning stages but are expected to take root this year.

“We tend to see a lot of large -scale projects versus small-scale. There is more activity going on with larger projects right now,” Till said.

In Fleetwood, Ed Overberger, director of business development at Descco Design & Construction Inc., said he sees the opposite trend in industrial construction, with smaller-scale projects flowing in for existing buildings that may be adding space or installing equipment.

Overberger said the government shutdown and worries about health care reform did not help the construction industry. In addition, clients were not pushing forward with large projects because of strict and costly regulatory guidelines.

“I have to say, though, that I am seeing a little increase in optimism for 2014, and there is at least an upward trend in smaller than average projects,” he said.

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