Builders try to nail down anything that is going up.

• Position: Construction

During the '90s, Raleigh-based Clancy & Theys Construction could focus on commercial jobs, avoiding the hassles and delays of public projects. Its home market, the Triangle, was booming. But as the economy slipped into recession, demand fell for commercial offices and other private buildings. "So much of the private work is tied to the developers' optimism," says Scott Cutler, vice president for marketing.

Now, like many of the state's contractors, Clancy & Theys is bidding for more public work. "We have 30 superintendents on staff in our Raleigh office. We need two dozen jobs running. We need to land six a quarter." These days, the only way to ensure that the pipeline stays full is to vie for public projects.

"There is just a lot of apprehension and concern about the market right now," says Dave Simpson, North Carolina building director for the Carolinas Associated General Contractors. "Things appeared to be trailing off before Sept. 11. That added to the woes. Contractors are getting jittery."

A sedative for builders has come in the form of a trove of public construction money that began to hit the market in 2001 - $3.1 billion for the state's university system and $1.2 billion for elementary and secondary schools. "We're doing a lot of bids for the bond money," Cutler says.

Commie Johnson, president of Greensboro-based R.L. Casey, which specializes in public jobs, is feeling the new competition: "Where you used to have five contractors bidding on a project, now you have 12 to 15." Indeed, public work has become the lifeblood of many. Backlogs of projects that built up during the '90s boom are starting to dwindle. And banks are hesitant to back new projects.

Of course, not all commercial construction has dried up. Mike Cooke, president of Weaver Cooke Construction in Greensboro, says his company continues to do well in niches such as retirement homes and historical renovations. Weaver started work this year on Asheville's $17 million Grove Arcade, a downtown renovation, and is beginning a $24 million retirement center in Concord called Taylor Glen.

More private projects were supposed to have been sparked by 11 interest-rate cuts in 2001 by the Federal Reserve. The Fed has kept cutting rates to induce businesses to borrow and invest. Trouble is, other regulators are sending the opposite message to lenders. As is typical in a recession, they have been cautioning banks to pay attention to declining credit quality, particularly on commercial...