Mechanical, Electrical Subcontractors See Changing Market

by Mark Hengel  on Monday, Mar. 17, 2008 12:00 am  

Business at Nabco's northwest Arkansas office is another issue, Unwer said.

"That market has definitely been feeling a recession-type atmosphere," he said.

Unwer expects one market to expand, though, he said.

"We are starting to see some money for education," he said. Money provided by the Arkansas Department of Education's Partnership Program is funding new school construction, he said. Schools are also attempting to bring older buildings up to codes established by the department.

The market for electrical contractors in northwest Arkansas has weakened of late, said Robert Killion, executive vice president of the Arkansas division of Marrs Electric Inc.

Marrs' 2007 revenue, $8.4 million, was off by more than 20 percent from the previous year. Killion said a larger number of contractors are bidding on a smaller number of projects, resulting in slimmer margins.

Killion said he expects the construction slowdown to continue through much of 2008.

Dean Hoover, vice president and chief operating officer of Koontz Electric, said the firm has shifted its business away from government work during the past years. Government contracts normally make up about 75 percent of their work, he said, but recent stalemates in Washington, D.C., have stalled many projects the firm has with the U.S. Department of Energy and the U.S. Army Corps of Engineers.

"Many of our clients are working without approved budgets," he said.

The Morrilton firm has shifted its focus to the private industrial sector to make up for the loss, Hoover said. The firm is currently working on the new LM Glasfiber complex at the Little Rock Port Authority.

He estimated that the industrial work now makes up about half of Koontz's workload.



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