Laborers, contractors feeling pinch of shaky economy

James Hull, right, with Modular Home Set hands a board to Michael Hoyle while building a roof on a garage for a house under construction off S.C. 322 on Thursday.
James Hull, right, with Modular Home Set hands a board to Michael Hoyle while building a roof on a garage for a house under construction off S.C. 322 on Thursday.

Howard "Bo" Godfrey sat on the tailgate of his bosses' work truck last week, boots dangling off the ground as he watched two co-workers cut lumber for garage rafters.

They're getting paid. He isn't.

"Got laid off about three and a half months ago," he drawled. "But that says something about a man who still comes out to the job site, wantin' to work."

Godfrey, a Rock Hill resident, is one of a growing number of local construction workers who can't find enough work as a decline in residential home building has drastically reduced job opportunities for laborers and subcontractors.

"I've got some unemployment, and I cut grass here and there. You do what you can to get by," Godfrey said about making ends meet. "You can't sit home and cry."

Recent housing boom 'a lie'

As the national credit crunch has unfolded and lenders tighten the reigns on borrowers, many large, national tract builders have scaled back. That has left local drywall, electric and carpentry companies, as well as others, without work.

Many have turned to remodeling and renovation projects to stay busy. Others have survived thanks to a steady custom home market. Some have been forced to lay off workers and tighten purse strings.

"We saw this happen in the early 1980s when (interest) rates were 20 percent, and it happened again in the early '90s. It happens about every 10 years, and we kept waiting on it around 2001 and 2002, but things just kept booming," said contractor Robby Belk, board chairman of the Home Builders Association of York County. "It all turned out to be a lie."

Belk said as the housing bubble continued to grow in recent years, large tract builders and smaller startups all tried to cash in. When the bubble burst last year with a wave of foreclosures, lenders balked and the market began to retreat.

"Everybody was getting into the home building business. There was a mortgage office on every corner," Belk said. "Now, everything is correcting itself."

Since the end of 2007 and into this spring, home-building in York County has slowed drastically. New single-family home permits in York County, a thermometer for the industry, decreased in 2007 by almost 900 permits, a 25 percent dip. It was the first time permits fell since at least 2000. Mobile home permits dropped, too, from 168 to 69.

In the first quarter of 2008, the trend worsened, with a 44 percent drop in permits for single-family homes and a 50 percent decline for mobile homes.

State unemployment data reflect the decline. In the past year, more than 7,300 construction jobs have been lost in South Carolina, according to the state's employment security commission. About 2,400 construction jobs were lost in April alone. It's the fastest-shrinking sector of the job market.

'We can't build houses'

Laborers and subcontractors have been hit the hardest.

Red Barnette, owner of Modular Home Set, a Rock Hill business that contracts with modular home dealers to assemble the pre-manufactured houses, lost half of his staff when his work load dropped from one house every week to less than one a month. Four of his employees quit because there wasn't enough work. A fifth, Bo Godfrey, was laid off.

"I did have a good crew. But I understand they've got families and mouths to feed. They had to move on," he said. "Right now, we're just trying to make it through the hard times. That's all you can do.

"This whole thing is so far above us. We don't have anything to do with it," Barnette said from the roof of a garage he was building near McConnells last week. "If people can't get credit, we can't build houses."

But finding other work hasn't been easy. Just ask Glenda Rawlings, vice president of Excel Staffing in Rock Hill. Rawlings said the number of applicants looking for construction and skilled-labor jobs has increased drastically in recent months. The only problem? Employers don't need extra help.

"We've seen a huge drop since the first of the year," she said. "A lot of our clients that would have been hiring skilled labor have been pushing their projects out. First it was delayed until February, then March, then delayed to April, and then May. Business isn't nearly what it has been."

Remodeling jobs increasing

However, there are signs of hope. The economic downturn has forced many homeowners to consider remodeling or adding on instead of building or purchasing new homes.

That's been the difference-maker for Bob Henson, a Rock Hill drywall contractor and owner of Bob's Drywall. Henson said people hiring his firm for small remodeling and renovation jobs have saved his staff. He hasn't had to let anyone go.

While he admits that business has slowed down, he has been able to survive by switching gears to smaller, renovation projects.

"We've seen the new residential jobs slow way down," Henson said last week. "But the remodels are up. So, it's only affected us slightly."

Another potentially positive indicator was the slight increase of new homes sold nationally in April -- up 3.3 percent. But in the South, sales continued to decline by 2.2 percent, according to the National Association of Home Builders.

Nevertheless, Red Barnette believes it's only a matter of time before the economy cycles around and business returns.

"They're makin' babies everyday," he said. "They've gotta live somewhere."