December 2013

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Page 35 of 75

Riding High in Houston As AED gets set to roll out the 2014 Summit & CONDEX in the "Oil Capital of the World," CED peers into the sectors that make equipment dealers pretty darn glad to be here. BY GILES LAMBERTSON The City of Houston decorated the reflection pool area outside City Hall just before Thanksgiving, preparing for the Mayor's Holiday Celebration & Tree Lighting on Dec. 6. Once Santa takes his leave, AED comes to town Jan. 15-17. CED photo by Phil Grant. Sam Houston was a proud, stubborn, and accomplished man, and his namesake city displays the same characteristics. Slugged by recession in 2008-'09, the southern Texas city was only momentarily staggered before resuming its prosperous march. The difference between the economic downturn in Houston and elsewhere, said Jerry Nevlud, CEO of the Houston chapter of Associated General Contractors, is that Houston's wasn't as long-lasting. "We were one of the last ones to go into recession and, because of oil and gas, one of the first ones out. We experienced some lean times, but not for as long." As a state, Texas dodged the recessionary bullet partly because of landuse policies that don't inflate land prices. Developers were able to build and sell reasonably affordable housing and avoid the extremes of speculation and underwater mortgages that devastated other areas. "We did have a downturn, a lot of it based on real estate," said Curtis Lindsey, president of Houston's Lindsey Construction. "But we hadn't had the escalation of new home construction that some places did. We experienced 3 to 5 percent growth, so we didn't have near the distance to fall. The correction wasn't as hard." Which is not to say that builders and equipment dealers were unscathed by the economic slowdown. "I wouldn't call the recession a minor downturn," Lindsay added. "You hear of stories that business activity was down 70-80 percent in some parts of the country. From the friends I have in this market, most of them were down about 50 percent in volume. I'd call that major." Busy to Really Busy The state of the construction economy in this seaport city is described by industry observers in adjectives ranging from "steady" to "boom." The former estimation is by an executive in the heavy construction industry who 34 | www.cedmag.com | Construction Equipment Distribution | December 2013 prefers not to be quoted, perhaps because it sounds ungrateful in 2013 to bemoan steady work. In any event, his complaint is apt to be short-lived: Plenty of highway work is in the pipeline. The Houston District of the Texas Department of Transportation delivered $1.3 billion in construction projects in Fiscal Year 2013, which ended Aug. 31. It was the highest dollar value of construction ever authorized by the district in a single year. "This major milestone comes at a time when demand for the use of our roads is increasing and our highway infrastructure continues to age," said the Houston District engineer, Mike Alford. For contractors who missed out on those contracts, the good news is the department expects to contract another billion dollars of work in the current fiscal year. A major roadway is being carved from Texas soil some 25 miles north of the city center. San Antonio-based (continued on page 38)

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