With worries mounting and job prospects dwindling from the lack of private and public-sector construction activity in the state, New Jersey’s engineering firms are seeking other means of bringing in work and revenue, either by expanding into new sectors or ramping up operations in other states.

Source: NJBIZ

“There are huge issues affecting the engineering industry,” said Thomas M. Howell, a vice president at Taylor, Wiseman & Taylor, a Mount Laurel-based engineering firm. As much private-sector construction has stalled during the recession, “engineering firms are not doing the designs that make it happen.”

The outlook is equally dismal for public-sector construction, which suffered a major blow last month, when the state halted all New Jersey Department of Transportation and NJ Transit projects in the planning and development phase because the cash-strapped Transportation Trust Fund lacked the money to allow them to proceed; much of that initial project work is handled by engineering firms, Howell said. The cancellation of the trans-Hudson tunnel only worsens an already dire situation, he said.

With construction work drying up, the state’s engineering firms have had to pursue alternative sources of revenue.
“There’s been a significant slowdown, to a crawl, in the private site-development area, both private residential site development as well as commercial,” said Robert Gerard, chief marketing officer at Birdsall Services Group, a Sea Girt-based engineering and environmental consulting firm. As a result, “we’ve shifted more resources into the areas of water and energy.”

Birdsall has served as the renewable-energy consultant for the improvement authorities in Somerset and Union counties since 2009, and Hudson and Cumberland counties beginning this past summer, he said. The firm assisted the Somerset County Improvement Authority in the selection of the successful bidder for a major public solar initiative to build 7.6-megawatts of solar arrays at 31 municipal, school and county locations, and will continue to be involved in the construction and administration of the project over the next couple of years, Gerard said. 

The company also is conducting water quality evaluations at Barnegat Bay for one of the local municipalities, and is making infrastructure improvements and upgrades to the wastewater and potable water systems of several water utilities.
Revenues from both water resources and energy projects have doubled between 2009 and 2010, and together now account for 15 percent of Birdsall’s total revenue, Gerard said. Land development work, on the other hand, represents about 15 to 20 percent of company revenue — but earnings have fallen about 20 percent over the last two years, he said.

Richard Maser, president and CEO of Red Bank-based Maser Consulting, said 2010 will be a good year for the firm overall, but “in terms of what’s going on in the economy, I’m more concerned about next year.” The firm counts many municipalities as clients, but many of those towns have not yet felt the full impact of reduced tax revenues and state budget constraints, he said: “I’m envisioning that the capital work they normally do will be considerably less next year, as they grapple with the constraints of the economy.”

Because of this, Maser Consulting is trying to win contracts with government agencies the firm had not previously worked with, as well as picking up new municipalities as clients. “We are looking to offset the decline in existing accounts by gaining new accounts,” said Maser, whose firm is providing site, civil, traffic, geotechnical and other engineering services to a major redevelopment project involving more than 3 million square feet of commercial space and 2,000 housing units on a 400-acre site in Sayreville.

The firm has also been doing more surveying work, which now makes up about 20 percent of Maser Consulting’s business; utility companies account for about a quarter of the surveying jobs. Revenues from surveying have risen at least 25 percent this year from 2009, he said.

Both Birdsall and Maser also are keen on expanding operations into other areas. “We haven’t lost sight of geographic growth and the need for geographic growth and presence,” Gerard said. In particular, “there’s great public and private work in South Jersey that we’re pursuing” — such as the Next Generation Aviation Park, in Atlantic County, for which Birdsall is providing site development services. So “we really want to focus on building a strong reputation in South Jersey.”
In May, Birdsall acquired select assets of the now-defunct engineering firm CMX — including its Voorhees office, which doubled the number of Birdsall’s South Jersey employees.

Although 80 percent of Maser Consulting’s work currently is in New Jersey, the tough regulatory policies in the state have made it difficult for developers — which historically have made up many of the firm’s clients — to work here, according to Maser. So “long term, we’re looking to have a stronger presence out of state,” he said.
For starters, Maser Consulting has been taking on more projects in New York.

“If you went back two years, we had hardly any work there,” said Maser, whose firm is doing surveying work for a transit tunnel project in Manhattan. “That’s one area where we think there’s a lot of opportunities for increased revenue.”

Maser Consulting also plans to expand into Maryland with the acquisition of a small or midsized firm there in the next six to nine months, he said.

Having looked at states from Georgia to Massachusetts, “we felt Maryland has a lot of opportunities, a lot of it related to military facilities expanding,” Maser said. “The kind of work that we do is generated by new jobs being created,” and the military is relocating jobs to Maryland from places like Fort Monmouth, he said. “We just see that as an area that has a chance of growing out of the economy a little bit quicker than New Jersey.”

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