No one had to tell Scott Banks of Pacific Interiors in Cobb County that housing starts in the South are weak. Banks continues to see a stagnant demand for his business since the red-hot construction days early in the decade, besides the numbers that prove it. .
On Tuesday, a U.S. Department of Commerce report showed builders last month started 629,000 homes nationally, a 14.6-percent increase from May, and Georgia and the rest of the South experienced a 10.6-percent increase in starts.
However, the regional numbers still hover near historic lows for the past three decades.
"There is no comparison to five years ago," said Banks, whose Pacific Interiors installs floors, cabinets and counter tops. "The difference is we have gone from running 10 crews to two crews, part time."
Much of the recent growth came in apartment construction, not single-family houses, another sign that new construction remains flat. The National Association of Home Builders said that jobs associated with new homes represent a significant impact on the economy; each home built creates three jobs for a year and generates about $90,000 in taxes.
When times were good, Pacific Interiors did only floor installations. As work became more selective, Banks and his fellow workers moved into new areas such as counter-top installation for new revenue. Even with the wider offerings, they use fewer workers and subcontractors. Business remains strained.
"Everybody could stand to have more work," Banks said. "One of the biggest issues now is everything is priced so competitive, the profit margin is slim. You have to do a lot more work to make the same amount of money."
Among metro Atlanta counties, home permits issued this year are comparable to last year's, yet another indicator that housing starts remain sluggish.
Smart Numbers, a Marietta firm that tracks every phase of home building, showed that housing permits issued in metro Atlanta have fallen at disturbing levels since August of 2005, when they peaked at more than 6,500. Housing permits hit a low in December 2008 with fewer than 500. The number has rarely made it above 1,000 per month for the region since.
"New construction can't compete with distressed sales on the market," said Steve Palm, Smart Numbers CEO. "It's just not going to come back this year and probably not next year. And when you are down 90 percent in construction, that means 90 percent of those small businesses associated with construction are out of work or out of business."
Many of those who remain in business in the field are underemployed.
"Instead of doing three projects in two weeks, they may be doing one every two weeks," Palm said.
Employment estimates from the Georgia Department of Labor show that workers in six construction trades areas dropped 32 percent: from 65,730 in the second quarter of 2006 to 43,099 in the same time period last year.
Electricians fell from 18,690 to 10,621, carpenters from 26,400 to 20,568 and roofers dropped from 3,710 to to 1,858. Plumbers dropped from 10,920 to 6,720, masons fell from 2,410 to 1,085 and pipelayers went from 3,600 to 2,247.
Kenneth Fortner, who owns Precision Contracting and Construction in Lawrenceville, also has witnessed results of the downward pressure on the industry. Contractors who used to build houses in subdivisions are turning to Fortner's area of expertise -- remodeling -- to keep the bills paid.
"I have seen a lot of them move into the business," Fortner said.
Fortner estimated he is using about a third fewer subcontractors than before, and he does more of the work himself.
"I've seen it loosen up a little, but not enough to say positive things are coming," he said.
The Associated Press contributed to this article.
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