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Engineering firms feel pinch of funding cuts

Engineering firms in the region are like many other professions and trades that have seen layoffs, shrunken profit lines and a lack of new work.

A great deal of public funding has dried up, which has cut business for some area engineering firms, but others have looked to new areas for work and even found growth.

Mark McAnany, president of the Rochester Region of the American Council of Engineering Companies of New York, said all 36 of its members are feeling the affects of the economy and the squeeze in spending from the state. Most have had layoffs, too.

McAnany said infrastructure has been undervalued and slashed during budget cuts, and when the state budget’s approval was delayed for months, it froze many projects. That hurt engineering firms across the state, including his, he said, which had to lay off some workers.

“If you look at the New York state funding pie chart, the amount to transportation and infrastructure has shrunk,” McAnany said. “When all the other pressures come in from medical and education, the funding shrinks.”

McAnany is the transportation manager at Bergmann Associates Inc., a firm specializing in architectural and planning services for the building, civil and transportation markets.

The Northeast has the oldest infrastructure in the nation and needs repair and replacement. He said investment in infrastructure brings engineering and construction jobs and attracts business.

“We’re kind of an invisible profession. We just want people thinking that when their taxes are spent, they’re thinking about the infrastructure,” he said. “It’s a catalyst for other healthy economic development. Quite often, private investment comes on the heels of public investment. It’s just proven time and time again that this is money well spent.”

Other firms, like T.Y. Lin International, have also seen some financing for publicly funded projects dry up. Patrick Waterman PE, the firm’s director of business development, said state projects are dry but they are working on the Rochester Civic Center parking garage for Monroe County and conducted a Broad Street aqueduct rehabilitation study for the city of Rochester. He said the state became too unreliable as a source of work.

“Everybody is just starting to understand that the state really won’t be doing anything until the state is done with elections and the new governor is sworn in,” Waterman said. “You’re looking at the summer of 2011 before work starts to come back.”

He said most firms, like T.Y. Lin, saw private sector work dry up because of the economy. Now, he said, private work is starting to come back. They’re doing work for LeChase Construction, Xerox and McDonald’s. The company has had a handful of hires, despite having a few layoffs earlier in the year. He said some firms are still laying people off, though.

“This is where you have to be diversified and have other clients than the city, county, airport — all these other public sector jobs that have state funding and are tied in some way to state funding,” he said. “You don’t sit and wait. You have to turn over rocks wherever you can. You’re always looking for the next opportunity, looking out there knowing there’s only going to be a certain number of state projects coming.”

The firm has branched into some new areas, like designing three new biogas production plants in the state. Biogas is a growingly popular technology that creates gas from the biological breakdown of organic matter. They’ve also used the firm’s specialty of parking garages and lock and dam work and are selling them in new territories across the country.

“Underneath it all, is taking good engineering practice and applying it to different markets,” Waterman said. “You have to take core services and sell them outside the area.”

David J. Meyer, partner with Pathfinder Engineers and Architects LLP said the firm is on the verge of concluding a record-breaking year for the third year in a row. He said the company has started to work in

“We’ve done well and grown in spite of the economy. The fundamental part of that is we’re deployed in the energy arena, and there’s a lot of interest in infrastructure,” he said.

He said it’s not a perfect world, and that Pathfinder still has challenges — they had layoffs midway through the year, as well.

“Our firm has also been hurt by the late state budgets. You can talk to any engineering firm in the state and they’ll say the same thing. It’s been absolutely insane,” he said of the length of time it takes to pass a state budget. “Those of us who had a fair amount of work, and my firm is one of them, we really had to scramble to make payroll and get the banks to extend our lines of credit. And we’re still going through that.”

Until three or four years ago, 80 percent of the firms work was private in industrial, Meyer said. That work disappeared for two years, and like many firms, they saw an increase in work from the federal stimulus funds but that quickly went away. Now private work is starting to come back.

“I just think the economy went to heck, and they had to curtail costs to survive financially,” he said. “I’m hearing that things are coming along. It’s not great, but it’s getting better. People’s backlogs are strengthening and that bodes well for feeling more confident as we’re coming out of this terrible time.”