Construction boom brings new set of problems.

Perhaps for the first time in history, the din of the construction boom is echoing on all sides of the globe simultaneously, and contractors are finding themselves hard pressed to compete for limited heavy equipment supplies manufactured by a handful of companies. "This is certainly the worst I have ever seen equipment supply being stretched. It is an industry-wide problem. Everyone is experiencing it," said Steve Sommer, executive vice president of Bovis Lend Lease, Inc.

"It's a result of the economy. It's a result of the present construction boom we are experiencing in the United States, and perhaps more importantly, the construction boom the world is experiencing, in China and in the Middle East, especially, but it's everywhere.

"I can't think of a city in the world right now that is not experiencing a boom in construction." At home, New Yorkers are in the throes of the largest construction frenzy most industry professionals have encountered in their careers."

It seems impossible to find a daylight hour during either the week or weekend where a worker is not boring an auger, or digging a backhoe or dumping backfill over any street in the city.

"In New York right now we have $30 billion plus worth of projects going up between those currently under construction and those in the pipeline over the next five years or so," said Chris Ward, managing director of the General Contractors Association of New York.

"We have the number seven train line extension, the Croton water filter plant, we've got three major stadiums going up. The Atlantic Yards and the New York Times Building are going up, not to mention all the work downtown. The level of large-scale construction is almost unprecedented in the city's history."

Charles Maikish, executive director of the Lower Manhattan Construction Command Center which is coordinating the massive rebuilding underway at Ground Zero, said demand for heavy euipment in Lower Manhattan alone had doubled in the last 18 months.

Contractors wary of time constraints or price gouging that may result from the boom are ordering their equipment well in advance of their competitors. They are trolling large crane yards in the boroughs, putting their names on lists to lease equipment on Saturdays or Sundays nine months down the line. Large scale project developers are putting their feelers out for limited tower cranes or tunnel boring devices almost a year in advance of anticipated building dates with some evern buying them outright.

"Most construction management firms generally order equipment three to six months in advance. Here we are asking them to take a look out much longer--18 to 24 months in advance," said Maikish.

"Over the last 18 months, the need for heavy equipment in Lower Manhattan has virtually doubled," added Maikish.

Bovis contractors traditionally considered equipment actually incorporated into their buildings, like elevators, long lead items that required six to nine months advance order. Sommer now considers a significant portion of ordinary heavy equipment, like cranes, long lead items. Last year, Bovis contracted structural steel and reinforced concrete suppliers after building designs were set. Now that material is procured before the final plan is even drafted. The company has also recognized that specialized equipment such as rough terrain cranes and chumping cranes are getting harder to come by.

Many contractors are mandating an order of spare parts to be shipped with their equipment, biting the bullet on trumped up costs so that if one of the machines breaks, the seven days of wait time for air freight shipment does not compromise the completion of their project.

The booming demand from equipment has already been hammered into the suppliers prices. Premiums are tacked onto late orders and, overall, equipment prices have risen.

"The cost to build reflects the boom. There have been huge incremental jumps over the last year," said Glen Ravn, director of design and construction with the Sheldrake Organizaton. "I keep hearing that things around the rest of the country are slowing down. New York just has a market of its own."

Competition for precious natural resources like copper or steel that has increased dramatically in the past few years has also added extra weight to the cost of construction. Oil and gas prices have hit home, too.

The problem might not be quite as dismal as some predict. Just as demand allows manufacturers to jack up their prices, so does it create the impetus for new manufacturers to set up shop. Equipment exclusively designed by one company could go the way of the CAT, whose pioneering tractors are now made by different manufactuers around the world. And, with careful planning, there may well be enough equipment for New York builders to weather the boom.

"We don't have the luxury anymore of hiring a contractor when you need him to start and assuming the equipment is going to be available," Sommer said.

"It's a question of time. We have to be proactive in understanding how long the lead time is and to lock in the suppliers early on."