Remodeling Their Business Strategies: Construction Companies

The cost of making and transporting the vinyl siding they use has risen while business has slowed to a crawl, squeezing the company's bottom line.

To stay afloat, owner Henry Hilburn has had to make some tough decisions, including laying off four of his staff members and substituting them with subcontractors.

"We have to more or less just take the fat out and just work on the bare minimum," Hilburn said. "I have to lower my bottom-line profits, I have to pay my installers less money and I have to pass some of it on to the builders."

Hilburn isn't alone.

Construction businesses locally and nationally are hurting, crunched between rising building material costs and a lack of jobs in today's sluggish real estate market.

Many builders and their suppliers are slashing costs to make ends meet -- by trimming their staffs, diversifying the type of work they do, using less costly materials and building smaller, said Bernard Markstein, senior economist with the National Association of Home Builders.