The year 2018, for most companies, was one of the most challenging years to do business. However, it was not because of the lack of work, new government regulations, or competitiveness within the business,but rather the lack of labor force.
As you and your station come into the new year, 2019, there are a few items that need to be discussed when talking about building or renovating. First, let’s look at 2018 and the construction industry and see what we have just come away from.
The year 2018, for most companies, was one of the most challenging years to do business. However, it was not because of the lack of work, new government regulations, or competitiveness within the business, but rather the lack of labor force. As work started to pick up in 2018, so did the gap between supply and demand for skilled labor. Skilled labor is harder and harder to find as society turns their back on the “hard hat and overalls” way of life. As an older generation of workers retire and move out of the industry, there are not enough highly trained workers entering or maintaining the industry quota for work. Within the next 10 years, this will be a huge problem for contractors and owners needing work to be completed. For now, in 2019, skilled labor has a shortage, but is not yet in desperation mode.
Another reason construction was harder this year than past years was the weather conditions that struck our region. Record downfalls of rain soaked many months in the yearly calendar, pushing projects back and delaying schedules into unforeseen timelines. Two hurricanes sat, spun and blew our trees, ponds, rivers and surrounding land masses around. These storms mounted problems on problems as people continue to recover from the storms. As many volunteer groups within the state help their neighbors with labor, the supply and demand for materials is something not as easily available. It was a very wet year in 2018, which made business and construction projects slow.
The last reason business was so difficult in 2018 was because there was an abundance of construction that was appealing to do. The economy is the strongest it has been in years and with reduced global regulations and taxes by the government, more owners decided 2018 was the year to construct. Contractors had to find the happy medium when it came to projects they could successfully complete compared to the ones they wanted to try. Owners were more willing to give “Contractor B” a shot because their first choice was “so busy it would take six months before their next project could start.” Contractors that were able to branch out and complete projects outside their normal working field satisfied a customer’s needs but perhaps put further difficulties in their own tool bag. Not enough management, labor, or knowledge were often found during the project. All opportunities come with a price, and 2018 saw many companies push the limits of their durability.
All that brings us to 2019 and what we have learned and what we can expect in the coming year. What we can expect is prices to continue to rise. Material prices from vendors outside of our control, but also labor costs are going up because of the labor shortage that was previously discussed. Men and women will be compensated for their time and knowledge at a higher rate of increase than any prior year. Contractors are hiring, and the right candidates will be able to name their price. Your building committee needs to know and understand prices are rising and their budgets from 2016 are significantly higher today than first quoted. Construction prices have risen at a record percentage, nearing 12 percent across the board in 2018. The price increase in 2019 will be less than the increase in the prior year but further demands on the project will take precedence.
Another key element your building committee needs to know is that your local county and state codes change in January 2019. Some of the code related items are minimal but others are costly. Depending on your relation and need, your project could fall within further regulations. Ask your qualified Design-Build General Contractor about your project and what affects the newest codes have on your specific project. Also, more counties are continually changing their policies and procedures concerning accessing permits and needed drawings for a project in your area. Be sure your contractor has researched the jurisdiction you are located within and the contractor is familiar with the required documentation needed for permitting.
The final item your building committee or board of directors must understand that will directly affect your building project is the important factor of community health amongst the jobsite. Safety is an ever-growing conversation that is becoming more and more prevalent within the industry. Safety for the men and women working on site as well as the men and women of your emergency service department is a growing concern. We must be cautious when working at heights for our steel erection crews, roofing crews, masonry crews, and not to overlook safety when it comes to our painters, flooring crews and concrete crews. Injuries in the workplace are costly to a contractor but are preventable if precautionary measures are taken. Working at heights is a dangerous and potentially fatal activity when done improperly and the risk is not worth the reward. Safely getting the job done is the name of the game and working together to make the jobsite the safest possible workplace is the goal for 2019.
Further training and understanding of the daily tasks and goals will be one of the many benefits of a safer workplace. Ask your Design-Build General Contractor what their safety standards are and ask for their safety record to ensure you are not only hiring a qualified company to build your station, but also a safety conscience company that looks out for the men and women at your jobsite.
Construction in 2019 is going to once again be a booming industry to be associated with. Ensure your building committee understands the looming factors, as well as the ever increasing prices, code changes, and the evident safety that will be ingrained on your jobsite in 2019. Ask your Design-Build General Contractor their thoughts on these matters and how they feel the changes will affect your project.
Goosie Kennedy is a Project Manager for D.R. Reynolds Company, Inc., a Design-Build General Contractor.