Unease about health of construction economy

If business activity is slumping across the county, the decline has yet to take a bite out of tax receipts collected at the courthouse. But it could be coming soon, particularly in the construction industry.

Building activity remained constant during the first six months of 2002. Orcas Power and Light Cooperative reports 133 new hookups during the period January - June. That’s slightly below the 143 hookups during the same six months of 2001. The San Juan County Permit Center confirms that permits for new housing are virtually identical to those of the previous year. But county Auditor Si Stephens is predicting that the returns of the first half are likely to lose steam. He said there are clear signs the local economy is running on fumes and the upward trend has already hit its peak.

"There's a real dichotomy going on right now," Stephens said. "From what I've heard from the people in retail sales, their business has slumped, so construction must be what's keeping us going."

And that too may be changing for the worse. Orcas Island contractors and others in the building trades are predicting that when their current projects are completed, they and their crews will be out of work.

Con Russell Construction recently laid off six members of his crew, and more could be forthcoming after the local contractor completes three jobs scheduled to be wrapped up the end of July.

Russell is not alone. Another local contractor, Russell says, hasn’t had any work since the end of June, while Sound Construction’s Terry Gillespie says his firm could be in similar straits as early as this fall. All, however, are holding up hope that things will improve.

Still another Orcas Island contractor who in recent years was shunning small jobs such as decks and garages now says he is scrambling to get any work that’s available.

But not everyone shares this gloomy assessment. Chad Hinkley, who works with contractors as manager of Sunset Builders Supply on Lopez Island, says, “It’s the busiest summer we’ve ever had,” adding that most local contractors’ jobs should carry them through the winter. And San Juan Island contractor Dan Pauls0on, of Paulson Construction, Inc., says his firm will be “busy for at least a year,” and won’t be laying anybody off.

Interestingly, while Orcas contractors were reporting plenty of work last winter, things were extremely quiet on Lopez. Now, the shoe may be on the other foot.

If the construction industry stalls, Stephens says, county government, the economy and local residents will feel the pinch, he added. Sales tax contributed $2.8 million toward the 2002 county general fund.

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