Wall Street Journal Features Gray CEO on Industrial Construction
In a recent Wall Street Journal article regarding the state of the economy, Stephen Gray, Gray Construction President and CEO, was quoted about the rebound in the manufacturing market and its positive impact on Gray Construction. The article discusses the growth in the economy as well as the risks that still remain. Read Stephen Gray’s recent blog post for additional insight on this subject.
Gray, which is ranked third among the top U.S. green contractors in manufacturing plant construction currently has several large projects, mostly located across the South, that are underway or recently completed including eight projects for Volkswagen on their Chattanooga, Tenn. campus; a Siemens gas turbine plant in Charlotte, North Carolina; a Whirlpool plant in Cleveland, Tenn.; multiple projects for Austal USA in Mobile, Alabama; a Caterpillar, Inc. manufacturing plant nearing completion in Winston-Salem, N.C. as well as a recently awarded Caterpillar, Inc. project near Athens, Ga.
About Gray Construction
In addition to being ranked 3rd nationally for green manufacturing plant construction, Gray Construction has designed and built close to 470 manufacturing facilities across the U.S. totaling more than 57 million square feet. Gray is a nationally ranked design, engineering and construction firm with offices throughout the United States. Gray provides customers with programming, planning, site selection, engineering, design and construction and equipment installation services. Gray’s experience includes projects for the automotive, distribution, food and beverage and manufacturing markets. For more information visit www.gray.com.
Economy Picks Up Pace, but Risks Remain
By BEN CASSELMAN and JON HILSENRATH
After more than two years of frustrating fits and starts, the U.S. economy is showing signs of moving onto firmer ground.
A host of reports Thursday underscored that point, as well as the perils that persist.
The number of Americans filing initial claims for government unemployment benefits has fallen to levels last seen before Lehman Brothers collapsed, the Labor Department said. The stock market, a leading indicator of growth, is off to its best start this year since 1998 and notched more gains Thursday. Meantime, consumer confidence has reclaimed ground lost last year, and another report showed that income growth is firming.
However the economy is far from robust. Government and company reports showed consumer spending has been mixed. And the manufacturing sector, though on the rebound, isn’t booming, according to a survey of manufacturing purchasing managers by the Institute for Supply Management.
There are other reasons for caution about the latest signs of growth. In 2010 and 2011, the recovery seemed to start the year with momentum but petered out by summer. Instability in Europe, the Middle East and elsewhere could push up gasoline prices or threaten the recovery in other ways after disrupting growth last year. Oil futures jumped in after-hours trading Thursday on rumors a pipeline exploded in Saudi Arabia.
Still, many business executives say they are prepared to move ahead with hiring and investment growth plans despite their lingering uncertainties about the outlook.
“We’re starting to get the sense that this one’s real and we’re starting to staff up just a bit,” said Jonathan Wolk, chief financial officer of American Woodmark Corp., a Winchester, Va., maker of kitchen and bath cabinets.
The company’s work force has been stretched thin by increased business. In the past couple of weeks, Mr. Wolk said, American Woodmark has stepped up hiring for the first time since the housing market collapsed four years ago. “Our sense is that the market is on its way back,” he said.
There are other hopeful signs that the foundations for broader growth are beginning to take root. Recent job gains have been broader-based and longer lasting than at other points in the recovery. Household saving is up and the home-building market is showing tentative signs of improvement.
And while government data on consumer spending remain soft, auto makers on Thursday said February’s sales had been the fastest in four years. Retailers also said they posted big year-over-year gains in February, with Wal-Mart Stores Inc. saying its crucial U.S. business is “back on track.”
Executives at Nanometrics Inc., a producer of diagnostic equipment in semiconductor plants, were skittish after the 2011 slowdown led to a disappointing fourth quarter. But Chief Financial Officer Ronald Kisling said the company, encouraged to see large semiconductor manufacturers such as Samsung Electronics Co. and Intel Corp. ramping up their spending in 2012, is moving ahead with hiring plans.
“We have been managing the business with one foot on the accelerator and one foot on the brake,” Mr. Kisling said. “We expect 2012 to be a growth year.”
A firmer economy would be good news for President Barack Obama in an election year. But even if the recovery takes hold, the economic strains of the past few years may linger in voters’ minds, particularly with the unemployment rate still high at 8.3%.
The apparent momentum also has implications for the Federal Reserve, which has tried repeatedly to pump up growth when it has faded in this recovery. If the economy picks up steam, officials at the central bank could conclude they don’t need to do more. Fed Chairman Ben Bernanke has said he is looking for the economy to demonstrate that growth is self-reinforcing. In two days of testimony before lawmakers this week, he has sounded a few optimistic notes but remains somewhat skeptical, describing growth as “uneven and modest.”
One big worry at the Fed is that household incomes haven’t been growing fast enough to support much additional spending.
The Commerce Department said Thursday that wage and salary income in January was 5% higher than a year earlier, the fourth straight month of gains of 5% or higher, which hasn’t happened since late 2007. But after adjusting for inflation, income and spending have seen only modest gains in recent months.
Home builder Taylor Morrison Inc. is seeing signs the turnaround is real. Chief Executive Sheryl Palmer said when the economy perked up in early 2010, the company resisted the urge to start buying up developed land—a caution that was borne out when the housing market quickly lost momentum.
But starting in late November, the company began to see both inquiries and sales pick up, and this time Ms. Palmer is reacting differently. The firm is filling positions on its land-acquisition team that have been vacant since the crash.
The litmus test, Ms. Palmer said, has come in recent weeks as prospective buyers have been undeterred by rising gas prices.
Decisions like Ms. Palmer’s can create a virtuous circle: Companies hire more workers, which makes consumers more willing to spend, which boosts demand for goods and services, leading to yet more hiring.
Gray Construction, a Lexington, Ky., builder of industrial facilities, has benefited from the rebound in manufacturing. This week, the company announced a contract to design and build a $200 million plant in Georgia for industrial-equipment maker Caterpillar Inc. CEO Stephen Gray said the strength of the manufacturing sector has given him the confidence to branch out. The firm this week made its first hire to pursue a new business in building data centers.
“If I can look forward and I can have a reasonable certainty of predicting profit, that’s going to allow me to dream a little bit, to say we’re going to grow the business,” Mr. Gray said. “To grow the business is going to cost money. I’m ok with that.”
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