The economy may be in the dumps, but Robert Petrucelli, president and CEO of the Associated General Contractors (AGC) of Massachusetts, is looking at the glass as half full for the long-term.

“We have weathered the latest recession as well as can be expected,” Petrucelli said.

To make it in today’s economy, however, contractors have had to make adjustments.

For example, he said, many Boston-based contractors are expanding their market to the larger New England area.

“I think companies are not [just] looking at Boston-area construction anymore,” he said.

Along with expanding outside their immediate area, contractors are becoming “consultants,” who are knowledgeable in all phases of construction, such as permitting and zoning.

In addition, he said, they have had to be trained in sustainable design in order to keep up with the desire for environmentally friendly buildings.

Contractors have also had to migrate away from the “dried-up” private market, he said.

“More contractors are becoming certified to perform public work,” Petrucelli said, adding there are a “host of projects with the Massachusetts Building Authority.”

One set of projects is public schools. The billions of dollars earmarked for public school construction is “the bright spot” in this dismal economy, according to Petrucelli.

The economic slump has caused numerous problems in the construction industry.

“Banks are not lending, so the financing is not there to expand,” Petrucelli explained.

In addition, the price of raw materials has increased, the profit margin is “razor thin” and there is increasing competition between firms.

The unemployment rate in the building trade in Massachusetts is approximately 25 percent, he noted.

“We lost a lot of good folks,” Petrucelli commented, adding he hopes they will return ones the slump is over, because the building trade will need a well-trained workforce once things pick up.

Building Boom Ahead

But smart firms are finding new ways to generate revenue.

For example, large firms are finding smaller projects to rake in profits. They are taking on projects such as interior work – renovating office space in order to lure in tenants.

And despite fierce competition, smaller firms are hanging in, managing smaller projects, such as renovating restaurants, car dealerships and churches.

This leaves the middle-sized firms taking the biggest hit in the sluggish economy, according to Petrucelli.

Subcontracting firms are also feeling the pinch, with an above average number closing their doors, he said.

Industry Changes

There are, however, a few major construction projects in Massachusetts moving ahead, including the Quincy Center redevelopment.

And, Petrucelli added: “When the economy turns, we are going to see a building boom in Boston in two or three years.”

Once the economy recovers, Petrucelli believes construction will emerge as a different industry.

“When we get out, [the industry will be] looking and acting differently,” Petrucelli said. Petrucelli predicted there will be fewer construction companies once the economy improves. Some businesses will merge together, creating “larger” firms.

Firms that survive will be leaner and more efficient, he said.

Until the economy bounces back, the goal is “to keep construction companies sustainable,” he commented.

When the economy does recover, AGC will be “responsive to the needs” of the industry’s firms, he said.