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Web posted Friday, June 25, 2010

Architecture, engineering firms fare well through recession

By Sean Manget
Alaska Journal of Commerce

Architect Nichelle Seely came to Alaska two years ago from Oregon because her industry was in dire straits elsewhere. In a tough economy, businesses generally don't build things.

"The Alaska economy seemed a lot more robust in some ways. I was hired two years ago in April, and since then we've hired two people after me," she said.

She started working with firm Bezek Durst Seiser, which currently employs 18 people.

Alaska's architect and engineering sector has slowed in the current economic recession – after decades of steady growth – but state economists say it's doing fairly well, all things considered.

In 2009, there were 5,253 salaried or wage-earning employees in the field in Alaska, not counting firms like ConocoPhillips that employ architects and engineers but are not solely dedicated to the profession, said Neal Fried, a state Department of Labor economist.

In fact, in the early part of 2009, employment in this field was on the rise, Fried said. It wasn't until late that year that employment levels in the fields began to soften, but even then the softening was moderate, he said.

Jeremy Shiok, Bezek Durst Seiser's business development manager, said the company is a generalist. When one particular type of construction stops, such as publicly funded capital projects, the firm can still lean on other types of construction projects to keep it going.

Alaska is ripe for work, Shiok said, because Alaska's population has increased fairly rapidly, and with an increase in population comes an uptick in buildings that must be designed and constructed.

According to the U.S. Census Bureau, Alaska's population was 550,043 in 1990. In 2009, the state's population was 698,473.

Seely said that many of Alaska's older buildings were constructed using less stringent standards than today's codes, and as such need to be updated to modern standards.

One point of anxiety for Shiok and Seely is the state capital budget. Though Gov. Sean Parnell has made his veto decisions already, some of the projects that made it past the governor's red pen still must be bonded and voted for on a ballot.

A robust capital budget can lead to a lot of work for such firms supposing the projects are put out to bid.

"At least one of our projects is in that state funding package," said Roy Rountree, a principal at firm Bettisworth North.

Rountree said the new capital budget has firms hopeful, but his firm has felt some pain as the recession has begun to affect Alaska; the firm has trimmed about 5 percent of the its workforce, Rountree said.

The 23-employee firm mainly focuses on institutional and education-related projects, though they have designed some office buildings, Rountree said.

Work has been fairly light, though 25 percent of the company's workload is military-related, a field that has been fairly active even today, he said. In fact, military work has been more stable than commercial construction, he said.

Rountree said his firm has felt some of the effects of the recession. Normally, the firm could anticipate with its workload would be 12 months into the future. Last year, he said, the work began to dry up, and the firm only had six months of work to look forward to.

"This year, it's probably a little bit less than that," he said.

Catherine Call, owner of Blue Sky Studio, an architecture firm that specializes in residential projects, said her three-person company is finding work at a steady pace. The company began doing remodeling projects, Call said, and has only been doing standalone housing since 2002.

One advantage to this focus on remodeling, Call said, is that while new construction may not always be bountiful, a firm like hers can still find work because remodel projects involve tweaking existing properties. So while there may not be as much in the way of new construction for the firm to work on, people are still anxious, and able, to remodel their homes.

Houses were built in abundance in the boom years during the construction of the trans-Alaska oil pipeline days in the late 1970s and early 1980s. Many of those houses weren't built to as strict of standards as modern houses, she said. Therefore, many of them are in need of the services her firm offers.

Faculty in the University of Alaska system are hard at work to graduate more engineering students to fill a need in Alaska for qualified professionals.

UA spokesperson Kate Ripley said the universities in Anchorage and Fairbanks collectively graduated 94 students in fiscal year 2009 in various engineering programs. The university intends to graduate 200 students by fiscal year 2012.

The University of Alaska schools do not offer an architecture program.

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