Lunch & Learn Construction –
Thank you to Ivan Gamboa with Tri City National Bank (Moderator), Erik Lindstrom with Gilbane, Charlie Haas with CG Schmidt, and Alex Egan with Riley Construction for participating in our first Lunch & Learn of the year on Construction.
Key takeaways include:
- Even with unprecedented cost escalation over the last year, it hasn’t caused any slowdowns. All three contractors said their pipeline is as strong as ever as they believe there is a lot of pent-up demand.
- The contractors are combating rising costs by helping revise projects to meet budgets. It is most helpful if they can be involved from the very beginning and become a true partner in the project. It is much easier to work with the designers and architects from the beginning to help provide insights on current costs. Early involvement and a collaborative approach make the most successful projects.
- How does this time frame compare to 08’? It’s not even close, in 08’ everything dried up and there was no demand. With high demand companies are trying to meet the demand and deal with workforce challenges that are on both the skilled trade and professional side.
- In regard to talent, Erik felt that our workforce is as good as anyone’s across the country but our labor pool is getting close to retirement age so we need to build it up. These companies are doing this in many ways including Gilbane’s rising contractor program & CG Schmidt’s young apprentice program.
- Projects where there is an existing relationship and a partnership between the client and the contractor very early on made those projects the most successful. This relationship helps to mitigate any issues, especially with long lead times.
- Contractors are becoming more selective in those projects that they bid on. Their resources are limited too and to provide the best service they’ve turned down projects or bidding on projects.
- Expectations have changed, but it is the contractor’s job to educate the clients. Developers are pretty knowledgeable, but communication is key.
- Electrical distribution and custom HVAC units are giving the most heartburn for lead times right now.
- Final thoughts –
- Erik – positive, pricing is only one aspect of the business, very excited about upcoming opportunities for work and room for people to grow.
- Charlie – cautiously optimistic, excited about the ability to transform and help redevelop communities
- Alex – positive about the entire market – one word – RELAX.