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Jeff Perala, one of the owners of Perlo Construction in Portland, has 26 years of experience in the commercial building industry. He anticipated the downturn plaguing Oregon’s building industry, but he didn’t think it would get this bad – and he’s not sure the worst is over.

Now that large-scale, private-sector jobs have for the most part disappeared, many contractors have turned their attention to the flurry of larger, public-sector projects that sped forward courtesy of federal or state stimulus money. But those projects are in danger of disappearing, too, now that those pots of money are running dry.

“We could see the slowdown (in the number of projects) coming, but we didn’t think it would come to a virtual stop the way it has,” Perala said. “Once we saw where it was going, we had to ask ourselves what it would mean for our workload.”

Perlo Construction’s workload is down 50 percent from what it was a few years ago and 10 percent down from what it was last year. Perala said he is employing 75 percent fewer workers in the field than during a typical summer construction season of the past.

He isn’t alone. S & B James Construction Management of White City had to cut its workforce by 50 percent.

“Did we see a downturn coming? Yes,” said Rob Hernandez, the company’s president of construction and vice president of management. “Did we expect to have just 40 percent of the business we had in 2007? No.”

Tom Gerding, owner of T. Gerding Construction Co. in Corvallis, said many contractors expect even more rough times ahead. They are burning through their backlog of jobs and not adding new ones, he said.

“We usually go into the next year with a reasonable backlog of projects; right now it looks like we only have two projects on the books for spring of 2011,” Gerding said. “We’re pretty busy right now, but our backlog is working off pretty quickly and 2011 is looking pretty bleak.”

Gerding has had to lay off up to 30 percent of his site workers, and office workers, too.

The main reason all of these men claim their businesses are suffering is because of the lack of private-sector building projects.

“We used to be 100 percent private, but now we’re working on 75 percent public projects,” Hernandez said. “The only one spending money down here is the government.”

Gerding said the lack of private projects has forced companies to try and stay busy by taking on small tenant-improvement or maintenance projects. One major reason for the decrease in the number of private projects, he added, is the recession.

“Those with viable projects can’t get through the regulations for approval or financing,” Gerding said.

Anirban Basu, the chief economist for Associated Builders and Contractors, said the down economy has resulted in a lack of job growth. Consequently, banks are less confident and less likely to lend. This hits the building industry especially hard since the private sector needs financing to get projects off the ground, Basu said.

Mike Salsgiver, executive director of the Oregon-Columbia chapter of Associated General Contractors of America, said the industry is in what he would characterize as a depression.

“The biggest challenge we’re seeing is that the private sector has pretty much dried up,” Salsgiver said. “It used to be 60 percent of the jobs were private and 40 percent of the jobs were public, when the economy was good. Now it’s roughly 95 percent public and 5 percent private. When I talk to individual contractors, some who have been in business for 20, 30 or 40 years say they’ve never seen it this bad.”

Gerding sees the current economy as a “chicken-or-the-egg” situation, in which people are questioning whether more construction jobs are needed to strengthen the economy or whether the economy needs to improve in order to create more construction jobs. Most are leaning toward the latter, he said.

Basu thinks the construction industry is in for another rough ride in 2011.

“I think in two to three years people will find that they are getting busy again. It’s not that they will have recovered, but the recovery will have begun in earnest,” he said. “It’s not that they’ll be building as many office buildings as they were in 2004 or 2005; it’s more that they’ll be building office buildings again.”