Contact:
Jack Knox
jknox@rfknox.com

Contracting Business Magazine

"From what I can see, 2010 and the first half of 2011 are going to be tough," says Jack Knox, president, R.F. Knox Co., Inc., Smyrna, GA.

"As everybody knows, the residential market has been down, but up to now, the commercial contractor has been able to weather the storm. Now, it's our turn. That's the way the cycle goes. The commercial market tails behind the ups and downs of the residential market."
 
R.F. Knox has three divisions: commercial HVAC, industrial, and architectural metals. Knox, president of his local Sheet Metal Air Conditioning National Association (SMACNA) chapter, says area union shops are looking at a 30% drop in sheet metal employment. This is typical of the non-union sector as well, he says.
 
Making cuts can be tough. "We have to take a hard look at the office employees, project managers, estimators. That's when some of your toughest employment decisions have to be made. We had to make some cuts, which has been true for most companies," Knox says.
 
R.F. Knox has moved full speed into Building Information Modeling. "We've tackled it head-on, with investments in software and training. We've completed five BIM projects," Knox reveals.

"To be successful, BIM requires buy-in from all site contractors. It has tremendous advantages for contractors and building owners: zero change orders (ideally), collision-free projects, and less jobsite clutter, and therefore a safer environment," he says. "If contractors aren't taking advantage of that technology, they'll be sitting on the sidelines watching the other contractors do the work. And, obviously, the companies that are taking advantage of coil lines and plasma machines have an advantage."
 
Knox believes the ability to obtain financing will be a major challenge in 2010.
"If you haven't aligned yourself with a solid banker and a solid banking relationship, it's probably too late to start," Knox admits. "Bankers don't generally look favorably on contracting - due to its volatility, the fact that we work off a percentage of completion, and we have a heavy dependence on lines of credit. Banking relationships and financing will be huge for 2010.
 
Another challenge Knox believes has impacted the industry, at least in the Southeast, is a large influx of inexperienced residential and light commercial contractors taking on larger projects, projects Knox says those contractors aren't prepared to handle.
"It drives down profitability throughout the market, they can't perform, and the customer finds out when they're more than halfway through the project," he says.
 
As far as LEED standards and the sheet metal contractor, Knox believes ductwork cleanliness and Indoor Air Quality are areas in which the most professional contractors can make a difference.
"Sheet metal contractors must take advantage of the proper practices that ensure clean ductwork: cleaning and capping all ductwork that leaves the shop; and capping ductwork at the end of the day so that dust and debris don't enter. That's the biggest issue for sheet metal contractors as far as LEED is concerned," Knox says.