"Lackluster." "Uncertainty." "Economic constraints."

Those less-than-positive descriptions were used to help describe the current state of the State of Michigan's construction industry, in a report provided by the Construction Association of Michigan (CAM).

CAM issued its "State of the Michigan Construction Industry" report for 2003 in conjunction with the Design and Construction Expo 2003 held last month at the Pontiac Silverdome.

"A thorough review of the analysis and statistics present in this report shows that the fundamentals are in place for a turnaround in the commercial construction market," said Dale McAtamney, chairman of the Board of Directors of CAM. "No need to panic. But, no cause for exuberant celebration either."

McAtamney noted that for the third consecutive year, Construction Project News, published by CAM, reported a continued increase in the number of construction projects put up for bid in the State of Michigan. "We also noticed that many projects are being placed on hold," he said. "The uncertainty that pervades our daily life has certainly affected the commencement of many construction projects."

Following are some highlights from the report:

• The report cited forecasts by the U.S. Commerce Department for U.S. construction to decline 1.2 percent this year, while a 1.5 percent drop was predicted by the Portland Cement Association. No specific percentage prediction was made for Michigan - but the entire Midwest is expected to see a decrease of 4 percent in construction activity from 2002 to 2003. That would be the first year-to-year general downturn in nearly a decade.
• For the third consecutive year, CAM has reported a continued increase in the number of construction projects put up for bid in Michigan. "Our reports show that by the end of this year more than $7 billion dollars worth of commercial construction projects will have been put up for bid in Michigan," McAtamney said.

Construction Project News reporters have noticed a definite increase in the number of "meat-n-potato" jobs in Michigan - and an increase in bidding contractors. Five years ago, a municipal project may have had a bid list of 20, but a similar project now has a bid list that tops 100.

• CAM reports have shown an explosion in "city hall work" with new construction and renovation of municipal facilities. CPN staffers have also detected a moderate surge in educational and medical construction and renovation projects. They continue to see an enormous amount of infrastructure work being reported as Michigan utilizes the funds that it receives from the federal government. Work on bridges, drain systems and roadways continues strong, but government spending can be fickle.
• After a breakthrough year for wage hikes in 2001, Michigan construction workers have seen slightly lower increases during 2002. But rates still rose more than 4% for both union and open-shop workers, bettering most increases during the 1990s.
• Wage stability is increasing with the growing trend toward longer-term contracts. Three-year agreements are now the norm. The recent economic downturn has also affected benefits programs. Health-care costs have risen, while health and welfare investment funds have performed poorly. Many contractors are now subscribing to their benefit programs on a one-year basis.
• Michigan contractors are deploying several strategies to steady their position in the market, including expanding their geographic base, entering into partnerships with architects and other contractors, and accepting smaller-scale work.
• Better education of owners is necessary. Some clients just don't understand that construction and manufacturing are two very different industries. One owner at a recent Michigan Construction Users Council gathering actually asked this question: "If you can build robots to assemble cars, why can't you build one to lay bricks?"
• For the long term, most construction executives remain fairly bullish about the market. Major factors that will have a deciding impact on business are the possibility of a conflict with Iraq, and the high cost of insurance after the Sept. 11 attacks.

AN ELECTRICIAN works at the Karn-Weadock plant in Essexville. Power plant work has been one of the bright spots over the past year for Michigan's construction industry.