December 5, 2013

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Contractors Discuss Issues, Challenges in Construction Sector

By Rachel Madison

December 5, 2013

The word optimism was mentioned frequently at a Utah Business roundtable event Wednesday, which included more than 25 construction, building and design industry leaders. Although these construction experts said they’re optimistic about the future, most believe that several challenges lie ahead for 2014.

A shortage of construction jobs, lack of skilled workers and highly competitive bidding wars have forced some construction industry companies to think outside of the box to keep their companies afloat.

Alan Johnson, president of IMS Masonry, said he has had to totally redefine his company to keep up with changing times.

“We had to redefine our company to survive,” he said. “What we’ve done is diversified. We do more than just masonry work, and we’ve spread out geographically [to work in surrounding states]. We’re going to have our largest revenue ever this year because of that.”

Rob Moore, president of Big-D Construction, said his company has also expanded to other states in order to keep growing.

“We’ve had to branch out a lot more and work in other states where we haven’t been before,” he said.

Jody Jenkins, director of electrical construction at Cache Valley Electric, said his company has also looked at its processes in order to keep up with competition. The company has also been more willing to take on small projects.

Slade Opheikens, COO at R&O Construction, said because the market is so competitive, many contractors are willing to work twice as much for half the fee, because they have people who need to stay busy and those people have mouths to feed.

Darin Zwick, president and CEO of Zwick Construction, said his company has branched out to constructing different types of structures.

“In the last few years, we’ve gotten into the multi-family [home] business,” he said. “We didn’t see ourselves in that area but now we’re a part of it.”

Jeff Clyde, president of W.W. Clyde & Co., said nationally, most contractors are reporting that they’re working at 75 to 90 percent of their capacity, which he feels is right on with Utah.

“Personally, we feel the same effect,” he said. “There are fewer jobs and more bidders.”

Although optimism was frequently mentioned during the roundtable, Rick Higgins, president of Mountain States Fence, said there won’t be a real change in the construction industry until things in Washington change. Many agreed that people aren’t building because of the uncertainty coming out of Washington from occurrences like the government shutdown.

Overall, Doug Welling, president and CEO of Jacobsen Construction, said Utah has been through a challenging period, but companies seem to be surviving.

“Utah seems to be leading the way, and I’m optimistic about the future,” he said.

The construction roundtable discussion will appear in the February issue of Utah Business.

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