Wrecking Corp. of America isn't quite living up to its name these days.

Instead of just smashing, dynamiting and tearing down old, decrepit buildings, the Alexandria-based demolition company spends most of its time painstakingly restoring and renovating them.

Observers don't diagnose the Wrecking Corp.'s change of heart as schizophrenia. Rather, they cite the company as illustrative of the changing winds sweeping through the building industry.

In the past five years, the construction industry nationwide has shifted from a knock-it-down business to a keep-it-up, fix-it-up one as the result of a transformation of America's attitude toward historic preservation and a hefty federal tax credit that encourages restoration over demolition.

"All of a sudden, about four years ago, the business went from one of knocking buildings down to saving buildings," said Michael P. Amann, president of Wrecking Corp. of America, the country's third-largest demolition firm.

"If we had to live strictly by conventional demolition -- knocking a building down and hauling it away -- we'd starve," said Sheldon S. Nasar, president of Demolition of D. C. Inc. "The big-building demolition work has basically disappeared over the last four to five years," he said. "Most of the work now is in the renovation field."

The growth in commercial building renovation has spurred a $4 billion industry that includes artisans who specialize in restoration: historic-window-and-door replacers; decorative-paint analysts; ornamental woodworkers; Corinthian column creaters; antique-lighting experts; antique-marble preservers; hand-hewn-beam specialists; historic-preservation consultants and gold-leaf gilders.

"Five years ago, I don't think you would have found these people," said James S. Williams, vice president of design and construction at Oliver T. Carr Co. "They were there, but there really wasn't a market for them."

Restoring everything from ceiling medallions to mosaic floors, scores of companies, such as John Barianos Studios in Rockville and Giannetti's Studio in Brentwood, are moving into old buildings to preserve history. Barianos, a master Greek artisan, has done extensive work on the interior of the U.S. Capitol, the Old Post Office at 12th Street and Pennsylvania Avenue NW, and Ford's Theatre.

Not only has the restoration craze been the impetus for new companies specializing in preservation, but it also is significantly changing the way that more traditional professions tied to the building industry -- architects, developers, property owners, demolition companies and general contractors -- are doing business. Restoration Workload Grows

Five years ago, developer Oliver T. Carr didn't have any restoration projects. Now, 20 percent of Carr's work is in restoration projects, including the turn-of-the-century Willard Hotel on Pennsylvania Avenue, the old Southern Railroad building at 15th and K streets and the Baltimore & Ohio Building in downtown Baltimore.

In renovating the 13-story Beaux Arts B&O Building, the Carr firm tried to re-create an aura of Renaissance grandeur in the main lobby and mezzanine with stained glass windows and classic Ionic pilasters rising from the marble floor to the high vaulted ceiling.

"Renovation projects have become much more in vogue," Williams said.

They've also become much more profitable, thanks to an investment tax credit put into place four years ago. Since 1981, money invested in resurrecting a historic building certified by the National Register of Historic Places has been eligible for a lucrative 25 percent tax credit, if the structure is then used as a commercial or rental building.

"If you take a look at any building downtown that's being renovated instead of knocked down, the tax credits play a major part in the financial viability of the deal," said WCA's Amann.

However, President Reagan's tax reform proposal would eliminate these historic preservation tax credits.

The rebirth of the classic Willard Hotel, which will cost approximately $108 million, is worth an estimated $10 million in tax credits, the developer said. The rescue of the Old Post Office building, the transformation of the decrepit twin turrets of the Apex Liquors building into the Sears House at Seventh Street NW, the restoration of the Mayflower Hotel on Connecticut Avenue and several Dupont Circle renovation projects all are results of the tax credits.

To qualify for the credit, a building must undergo a detailed review by the U.S. Department of the Interior, and renovation must keep 75 percent of the exterior walls intact as external walls.

Several more Washington building projects, such as the National Press Building at 14th and F streets NW and the landmark Southern Building at 15th and H streets, where ornate plaster ceiling and marble floors will be exposed and restored, qualify for other tax credits also set in place by Congress four years ago. Various Tax Credits Offered

Any structure more than 40 years old qualifies for a 20 percent credit, and even fixing up an early 1950s facility can earn the 15 percent credit for buildings more than 30 years old.

"Over the past three years, we are talking about more than $5 billion of rehabilitation investment nationwide in 6,800 buildings," said J. Jackson Walter, president of the National Trust for Historic Preservation, who argues that Reagan's tax proposal would end the restoration of old buildings.

More than $200 million has been invested in 145 projects in Washington alone from 1982 to 1984, according to the National Trust.

But it's not just the tax credits that have encouraged the restoration fervor.

"We see it as a response to the urban renewal of the 1950s and the early 1960s, when people started tearing down their cities and putting up new buildings," said Carl Nelson, a spokesman for the National Trust.

"People all across the country saw they were losing their cities," Nelson said.

Shalom Baranes, who says his architectural firm does a major portion of the historic preservation work in the District, agrees.

"One reason for the increased restoration is certainly the tax credits," Baranes said. "But it's also the growth of historic preservation groups like the D.C. Preservation League, and the expanding historic districts."

The District has one of the strongest preservation laws in the country, according to Ian D. Spatz of the National Trust.

When an area in the District is designated as a historic district, it is then protected by local preservation law, which restricts alterations and demolitions and requires a public hearing before the D.C. Historic Preservation Review Board for any significant changes to the exterior of the building.

The increased preservation work here is changing the way that architects such as Baranes do business. "We now have to work in teams a lot more frequently than we used to, because our projects tend to be very complicated and they require many different disciplines," he said. Bond Building Work Under Way

To get an idea of the breadth of different professions tied to the restoration of a single building, the renovation of the Bond Building at 14th Street and New York Avenue provides a good example.

One of Washington's first speculative office buildings, the Bond Building was constructed in 1901 in the Beaux-Arts classically inspired tradition. Restoration on the site began in February and is expected to take about 14 months.

The developer, Sigal/Zuckerman Co., put together a team of architects, architectural historians, attorneys, engineers and builders to discuss and design the project. Next, brokers were consulted. The team then began negotiating with the D.C. Preservation League, which took several months. And finally, it appeared before the city's Preservation Review Board and the D.C. Office of Planning for final approval.

"With a new building, all you need is the client, the developers and the architect," Baranes chuckled. "It used to be that we could design the building and submit the drawings for a permit and get approval with some minor modifications.

"Now, before we finalize anything, we have to bring in the staff from government agencies very early in the process," Baranes said. "The whole thing involves a lot more time and a lot more input."

For buildings that qualify for the tax credit, there are further delays. Despite its positive benefits, the credit adds two layers of review -- the Interior Department and the Internal Revenue Service -- to gaining approval for physical plans.

The demolition company rolls in next to strip and gut the building. Renovation is four times as costly as traditional demolition work because much of the work is done by hand, said WCA's Amann, whose firm renovated the Old Post Office building and the Torpedo Factory in Alexandria. Amann said his business, which is now 80 percent renovation work, has doubled over the last five years.

One of the major problems, however, is that wreckers often don't really know what is behind the deteriorating walls.

"It's inherently a dangerous situation," said Amann. "When you're building a new building, you've got engineering data to work with. But when you're taking down an old building, you're dealing with imperfect information. You're dealing with buildings that over the years have been through change."

When Amann's company was renovating the Army-Navy Club at Farragut Square and I Street NW, it encountered what is known as a "hung ceiling" -- a plaster ceiling hung from wire inside. Over the years, as various companies worked on the utilities above the ceiling, they had cut some of the wires out of the way. So, when Amann started to snip wires around the perimeter of the ceiling, the entire ceiling started to move.

"Fortunately, our men saw what was happening and got out of the way, so they weren't injured when the ceiling collapsed," he said.

But demolition workers aren't always so lucky.

Two years ago, an 18-year-old Washington man employed by a firm affiliated with Amann's company was killed while working on the restoration of the Willard Hotel when a brick wall and ceiling collapsed on him. "There was a piece of concrete in the ceiling that had no reason for being there," Amann said.

When the demolition teams move out, technical subcontractors that specialize in stonework -- including marble, granite, terrazzo and brick-facade restoration -- move in.

Because only the facade of the Bond Building was saved, no interior restoration work was done. But the Willard Hotel -- often referred to as the crown jewel of Pennsylvania Avenue -- required extensive technical restoration. So, another entire crew of interior designers, sheet-metal workers, ornamental plasterers, ornamental painters and tile and marble setters was brought in.

The Carr Co. plans to restore the Willard Hotel to very close to what it was in its heyday, replacing elaborately carved plaster and seals in the ceiling of the main lobby, restoring the St. Florient Rose marble columns, installing the replica crystal chandeliers of the Peacock Alley promenade and repairing the mosaic floors.

"There's a romantic mystique about restoring old buildings," Williams, of the Carr Co., said.

In its century of glory, 10 U.S. presidents resided at the Willard while awaiting their inaugurations, Mark Twain wrote two books there, and Julia Ward Howe composed the words to "The Battle Hymn of the Republic" at the hotel.

Inside the now-gutted, cavernous structure, hundreds of men don hard hats and stand on scaffolding amid the din and dust, covering the intricate plaster ornaments with latex molding to re-create them for other parts of the room from which they are missing. In the once-glittering Crystal Room, workers from John Barianos' studio stoop on the rubble-covered floor as they restore the bases of the Verde antique marble columns.

"We have to work a lot more closely than we used to with subcontractors and contractors," said architect Baranes. "We have to ask advice from people who understand materials like terra cotta, which was used in buildings built in the late 1920s and early 1930s."

Terra cotta, a glazed clay tile, was considered a miracle material at the turn of the century because it was less costly than marble and other expensive stones, Baranes said. But, over the years, there has been a decline in its use.

"Ten years ago, any developer who had to save something fought it," said Baranes. "Now developers, architects and the public are coming to appreciate old things. There's a certain richness in detail of craftsmanship and tradition that we just can't replicate today."