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Commercial construction strong, owners sayt

Though some corporate customers have cut back on their building budgets and residential demand is at a standstill, two commercial construction companies in Westchester County say their business remains strong in the slumping economy.

At C.W. Brown Inc., a 24-year-old general contracting company in Thornwood with about 70 employees, "We're looking at probably one of our best years" in 2008, said CEO Renee M. Brown. That projection holds for the next five years, she said.

"The unions locally are indicating a five-year backlog of work here in Westchester," company President Charles W. Brown said.

On commercial construction projects, "I think the owners are crunching the numbers and paying more attention to the kids that are coming in," Renee Brown said.

Though work on corporate headquarters "soon to be shrinking a little bit," said her husband, the Browns said their employee-owned company has more work with research and development companies, including the biomedical industry at The Landmark at Eastview, universities, hospitals and retail banks. In White Plains, the company is converting the former Verizon Communications Inc. office building at 400 Westchester Ave. for occupancy by Fordham University's Westchester graduate center.

"Talking to people on our side of commercial building, things are still moving very fast," Charlie Brown said.

With all of the work, Brown said the commercial construction industry is experiencing a shortage of professional people, especially seasoned estimators and project managers. "I think it's going to get worse before it gets better," he said.

At Schimenti Construction Co. in Mount Kisco, some repeat business has shrunk this year as retailing giants pull back on construction budgets and projects.

A 110-employee company that last year had $82 million in revenue, Schimenti builds stores throughout the Northeast, the majority in the tristate area, said vice president Joseph Rotondo. Its customers include Bed Bath & Beyond Inc., Best Buy Company Inc., Gap Inc., Chico's Retail Services Inc., a women's apparel chain, and Sprint Nextel Corp.

"We're seeing retail stores are starting to pull back budgets for construction and stores that were slated to be built in 2008 now have fallen of the schedule," Rotondo said. "Where Gap might have 10 projects that were slated for the next year, they might be down to six now.

"Deals that they can get out of, they're getting out of. Deals that they can't get out of, they're going ahead and building."

"Gap is pretty bad. We're seeing Sprint pull back a little bit. They don't call it pulling out. They call it putting it on hold."

For a contractor, "You need more clients to do the same amount of business," Rotondo said. "Instead of five Bed Bath and Beyonds, you might be doing four. So you have to make up that 2 million (dollars)."

While retailers are holding off on projects at suburban malls. "Manhattan is still pretty strong for us," Rotondo said. The company is building or has completed flagship stores there for Best Buy, Abercrombie & Fitch and Circuit City.

"Overall our business is strong," he said. "Fortunately we have lots of customers."

In Westchester County, Rotondo said, the company's more recent projects include Gap and Clark's Shoes stores in the Mall at Westchester in White Plains. Though contractors around the country talk of the cutbacks in retail projects, "I don't know if you see it as much in the retail sector here as in other parts of the country. It's slight."

Nationwide in the construction industry, producer price indexes in February increased more than 1 percent for diesel fuel, copper and steel products for the second month in a row, according to Ken Simonson, chief economist for the Associated General Contractors of America. Producer price indexes last month fell again for lumber and plywood, insulation and gypsum products. The producer price gap widened last month in between highway and street construction, up 11.3 percent over 12 months, and building constructions, up 2.8 to 5.6 percent, Simonson reported. The cumulative change since December 2003 in construction producer price indexes, up 30.9 percent, is more than double the consumer price index increase of 14.9 percent in the same period.

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