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Commercial Boom Softens Housing Bust
Francisco Flores works at Smoketown Plaza in Woodbridge, where construction workers with the specialized skills needed for commercial buildings find themselves in demand.
(Photos By Carol Guzy -- The Washington Post)
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Even installing wallboard in a fast-food restaurant requires different skills than doing so in a house, Merryman said.
Companies, too, are suffering different fates depending on how strongly they specialize in housing compared to commercial work.
Home builders KB Home and Ryland Group Inc. have cut hundreds of jobs. Mortgage lenders Countrywide Financial Corp., Washington Mutual Inc. and Ameriquest Mortgage Co. are laying off thousands.
Masco Corp. reported a 4 percent decline in its third-quarter profits because of lower sales of its cabinets, faucets, bathtubs, windows, doors and other home fixtures.
Weyerhaeuser Co. said its third-quarter earnings fell 26 percent because of lower wood product sales, lumber prices and log prices.
The companies feeling a little less pain are those that also supply or transport materials for non-residential construction.
In Chicago, for example, USG Corp., the nation's largest maker of gypsum wallboard, suffered a 3 percent drop in earnings in the third quarter because of the housing slowdown. But the results would have been worse if not for the non-residential market, which accounts for about 40 percent of the company's business, said spokesman Robert Williams.
The growing commercial market "certainly does cushion the impact of the softening of the residential market," Williams said.
Many people who live in the neighborhoods that arose during the boom say they're happy to see commercial construction catch up, bringing more services to their neighborhoods.
"I remember when I was growing up, it was nothing but houses being built," said Melissa Rook, 20, of Manassas, a college student tapping on her laptop in a Panera restaurant at the Signal Hill Shopping Center. "Now they're always building another restaurant, another place to go."
And Rook said she wants more places to go. "I would definitely be happier if there was a bigger mall in Manassas," Rook said, explaining that she often treks to the malls in neighboring Fairfax County for serious shopping.
It was consumers like Rook who prompted Arby's corporate marketing people to advise Gilligan's company to move into Northern Virginia in the late 1990s as the population was expanding.
"There was definite potential here," Gilligan said, recalling what she found when she moved to Manassas in 1998.
Gilligan said she chose the site at Smoketown Plaza because it is near both new homes and new workplaces, full of hungry suburbanites. She is already planning two more Arby's elsewhere in the county -- jobs that will help keep the construction industry busy.
"We're doing very well," Gilligan said. "We're seeing growth."
