I recently spoke with an engineering firm that has contracts with a number of small municipalities to manage their civil and sanitary engineering projects. They manage the mapping, planning, design and analysis for smaller cities that can’t afford their own in-house expertise. The manager that I spoke with indicated that the current focus on infrastructure spending, and the downturn in construction has been very good for them and their clients. Instead of cutting back, they’ve hired eight new workers in the past year.
The increase in work is due in part to stimulus spending, but also due to the bargains that can be had with many construction firms being idle. Projects that were planned and on the books at a specific budget amount can often be had right now for 20% or more off the originally estimated cost. This cost savings has spurred a great number of projects to move forward.
The philosophy of this firm was always to focus on public sector work, as the founders saw this as much more stable than development work. The decision has been a positive one for the firm in this downturn, but there’s concern that this flurry of activity is preceding a drought as many of the budgets and projects will be tapped as a result.
While aging infrastructure still poses real problems in most municipalities and good opportunities for work, a sustainable level of projects and maintenance may be difficult to achieve unless the economy stabilizes and moves toward steady growth.