This month, Utah Business partnered with Holland & Hart to host a roundtable event featuring building, construction, and design leaders to discuss women in the industry, impacts of the new administration, and concerns going into 2021. Moderated by Bruce Bingham, partner with Hamilton Partners, here are a few highlights from the event.
What’s the current state of the industry?
Troy Gregory | President | Hunt Electric
2020 has been a really strong year and we see the same for 2021. We have a really strong backlog going into 2022. We’ve seen a drop off [in hospitality] and in office space and retail, but multi-family is still running really, really strong.
Rich Thorn | President & CEO | Associated General Contractors
Contrary to belief, 2020 ended up being a really pretty good year across all sectors. When COVID-19 came out in February/March, everybody was going, “Oh, no, what’s going to happen?" But the construction industry rallied because it was considered an essential service. Everybody rolled up their sleeves and said “You know what? We’ve got to be able to deliver." And they adopted practices and procedures that allowed them to keep their doors open and keep delivering construction projects for the end-user. They did it safely. They did it with, to some degree, really high exposures to this virus.
How is your workforce, and particularly women in your workforce, faring?
Becky Hawkins | Founding Partner | Method Studio
From the architectural side of things, we’ve seen great success this year. Other than high-level positions where we’ve gone out of the state to seek specialty positions, we haven’t seen much of a dip. In fact, I think in some ways we’ve had greater success in the last six months than we did a year ago.
Ali Streetman | Construction Manager | Portman Holdings
I love working in this industry. I’ve never really had an issue being a woman onsite or being a woman leading the project. On our current architectural team for the hotel, three of the five architects that are working on the project are all women, with two of them in the lead position. So we’re taking over the world, get ready.
Becky Hawkins | Founding Partner | Method Studio
It takes a village, you know, but I have two [male] partners. I’ve never experienced any issues with them and we’ve taken that philosophy and applied it to our leadership and we have 43 percent women leaders. So yeah, rock on girls.
Gary Ellis | President | Jacobsen Construction
I would be lying if I said labor availability isn’t an issue. What we’ve seen generally is that we’ve got more large projects here locally than we’ve had in many years in the past. And I’m a little concerned that we’ve got so many large projects that we’re going to really tax the ability of our larger subcontractors to be able to continue to support all those projects.
With regard to women, we’re participating in a couple of different peer groups that are actually combining resources and letting the women in our firm meet with the women in their firm at various positions as well. And talking about their experiences and learning from one another and asking questions and helping provide feedback to us as well.
Jason Kilgore | President | Kilgore Companies
I think about the demographics of my company, and really there are so many people that are really out in the field operating equipment, driving trucks. And we have seen an influx of women over the last 10 years start to become truck drivers and operators. And to be blunt, the women truck drivers many times are much better than the men truck drivers because they treat the equipment better and our equipment lasts longer. You don’t have as high of repair with some of those women, and it’s really been really refreshing from our standpoint.
What adjustments have you made to deal with COVID-19?
Mark Harris | Senior Principle | Reaveley Engineers
During these last 10 months, as we’ve been working remotely, we brought on six or so new members to our firm. From the interview process to onboarding, to implementation of work, it’s all being done remotely. There are several of those new hires I’ve never met face-to-face and it’s been both challenging and a unique experience in that we’ve had the younger generation clamoring for work-from-home opportunities in our industry for years and we’ve been very resistant to it. These last 10 months have shown us that remote work is here to stay and it’s actually very productive.
Chris Knoles | Director of Marketing | Zwick Construction
The very first thing we did when it became apparent that COVID was going to have a drastic change on our operations was to just take a deep breath and realize that it’s hitting every single person, every single company, and every single industry in every country. [We realized] that we don’t have to outsmart what the next guy’s going to do in order to stay competitive and things have played out as expected.
Will we ever build another office building?
Becky Hawkins | Founding Partner | Method Studio
When the pandemic first started, with workplace design being a very large portion of what we do here, we saw a number of our projects go on a hold within 30 days. We truly thought we were going to be tightening up our workplace or corporate market sector, and what has occurred for us is there’s been a transition.
Many of those projects that went on hold have now come back. For one of our clients, we’ve taken what was going to be a renovation for them, and now we’re building a smaller scale office building. And then another portion of our work that’s grown significantly is rather than new 200,000 square feet offices, we’re doing more smaller offices and quite a bit more renovation while repurposing and rethinking how the space is used.
James Williams | President | AE Urbia
We were actually already able to work remotely so when this hit, our entire office was able to go home and continue working. And after a while, we brought everybody back. We were fortunate enough to use larger workstations so people could be sitting at their desks and [still social distancing].
This has worked very well for us. And we’ve kind of used our office as an example. It’ll take a while to get back to how it was, but I don’t think it’ll ever be the way that it was exactly. We’ll design with better ventilation systems, better circulation, and we’ll start to design for this type of issue because it will probably happen again in the future.
A lot of equipment and supplies come from places like China. How has COVID-19 affected that?
Troy Gregory | President | Hunt Electric
A lot of plants got impacted there for a while, or they shut down. And I think it’s similar in a lot of the manufacturing―they got behind and they’ve been trying to catch up on that. In breakers and panel and distribution, it’s starting to get better on your general products. On the big, long-lead products like transformers, those are still a concern for tight timeline type projects.
It’s really hard right now for contractors to lock down PVC pipe. We’re being told that after the first of the year, that price will start coming down, and they’re starting to catch back up with some of their supply, so that’ll be good. Copper is on a steady climb right now. Steel is flat. It’s high, but it’s flat. I think as far as fixtures go, it’s really hit and miss. Overall, I think a lot of the initial issues are starting to be worked through.
Aaron Metcalfe | VP | Hogan Associates Construction
I think this issue really brings up the importance of owners, developers, and architects pushing for the CMGC process. With the process, not only can the contractor be in contact with the subcontractors and suppliers, but also through constructability reviews, and through that process, we can help advise our clients and architectural partners on the best ways of procurement moving forward.
John Evans | VP | Okland Construction
The reality is that we just need to be on top of things right now. People have to be monitoring situations to make sure that we don’t miss the delivery materials. We have not had issues to-date yet. We are getting those notifications that we always get at the end of the year, but they are coming a little bit sooner from our steel suppliers, about the inflation and the rate increases that are going to hit in 2021. We’ll have to just see how they all materialize when we actually get there.
Jason Kilgore | President | Kilgore Companies
Concrete is going to go up $8 to $10 a yard in the Utah market. A little bit of questioning on asphalt, that’s going to be stable, it’s going to go up a little bit.
Just a couple of months ago, we had a concrete shortage, so I think that’s going to continue into 2021 as busy as we are. Hydrocarbons have been cheap over the last year or two, which has been nice. And I think that’s going to stay the same, but it also depends on what happens with travel with people driving cars and jets, and what has happened with our refineries.
Jeff Palmer | EVP | Layton Construction
I think the one question I get on this almost every day is, “Are prices going down?" Unfortunately, prices typically do not come down so each of us are [going to have to be] more competitive with each other with our fees. But in terms of pricing, as we’ve just heard, material price is not coming down.
Gary Ellis | President | Jacobsen Construction
Lumber prices went up through the roof last year, which was a very sudden and quick change. And they have come back down to some level, but they’re not coming down as quickly as we thought they might. The other thing that we’re very concerned with right now is the ports, because even as the factories can start producing overseas quicker and getting things shipped into the country, we’re having real issues right now with COVID and with all the online purchasing right now of everything getting held up at the ports for longer than expected.
With all of the reduced income sources due to COVID-19, will Utah have enough tax revenue to continue infrastructure development and road construction? Is there enough money to go around?
Steven Shepherd | President | BBFFA
We do a lot of work for the state of Utah. We have a big marketing meeting once a month and our list used to be two pages long of the things that we were chasing, now it’s half a page. And part of that is coming from the state of Utah. So it looks like it’s starting to have an impact.
Lori Haglund | Marketing Director | VBFA
The projects that we see going before the legislature and being approved by the legislature for state projects have really dwindled down and that’s kind of frightening. But I keep thinking back to 2008 when things were bad and they really infused money through the state into projects. And I think that’s how we weathered it so well. And so I’m optimistic that once this clears up there really, it’ll come with a vengeance.
Rich Thorn | President & CEO | Associated General Contractors
We’ve got a new administration coming in. One of the top priorities we’re hearing about is this new highway bill, not necessarily just continuing resolution that may be for the interim, but there could be some good money coming from the federal government. We also have a new governor and I’m confident that there’s going to be more work coming through the Utah Department of Transportation for the civil side.
We’ve got a legislative session coming up and there’s some talk about potentially a bond. That would be a good thing. One of the negative impacts of this COVID-19 situation is the local governments, or the collector road funds. Once everybody stopped driving, that really negatively impacted local cities and counties and their ability to build roads and to maintain them. We anticipate a little bit of a turnaround on that part of the funding stream for again, for the civil side of our membership.
We have a new governor and a new president. Do we see that being good or bad news?
James Williams | President | AE Urbia
It’ll be interesting to see what the new administration does as far as programs and funding. It really boils down to, if there’s money to borrow, then construction’s good. Soon, as the money stops flowing, that’s when we’re in trouble. We’ve been able to be profitable under a Democratic president or a Republican president either way. This last president has been really great for our industry and we’ve been very comfortable and we think it seems like the government’s very comfortable printing money these days. And so hopefully that money will continue to circulate and this new administration will build on top of the success of the last one.
Rich Thorn | President & CEO | Associated General Contractors
We have a lot of confidence, a high degree of confidence in Governor-elect Spencer Cox and his team. We have always taken a fairly conservative attitude about debt and about spending, although we have recognized investing in our future. So we anticipate really good things on the local level with good people steering the ship, both in the executive branch, in the House, and the Senate. We don’t anticipate any big curveballs.
Aaron Metcalfe | VP | Hogan Associates Construction
I think as far as Governor Cox, it’ll be interesting to see how his rural roots will play into things. There’s been this discussion about developing rural Utah better than what has been done before. DFCM has done some smaller projects as of late in 2020, with the backing of the state, trying to get some projects going, especially at the state park level.
What are your greatest concerns going into 2021?
Ali Streetman | Construction Manager | Portman Holdings
Just maintaining schedule and opening on time to deliver a product that’s been a long time in the making for Salt Lake City. And to get the [convention center] hotel open, and hopefully coincide with everything getting back to normal for the Salt Palace and the industry as a whole. That’s the reason we’re building this hotel in the first place.
Aaron Metcalfe | VP | Hogan Associates Construction
The security of our subcontractors, making sure that that base of workers and companies is healthy, profitable, not just with COVID, but financially as well, because it really is. The pandemic is going to create some financial issues long term.
And then we’re also facing some other construction work, residential, for one, that’s booming. So as commercial contractors, we really have to work with our subcontracting partners and make this a real kind of collaborative effort so that we’re all successful. It’s not just about the projects, it’s about the relationships moving forward and so that’s my biggest concern.
Chris Knoles | Director of Marketing | Zwick Construction
Going into this, my biggest fear, personally, was our subcontractors and their ability to change, adapt, and to step up or to make changes as needed, mainly from a financial perspective. Are they overreaching? Are they over-committing? Do they have the sophistication to meet the work levels that we’re still demanding of them?
And then also upstream at our clients. Do they have access to capital? Will they have access to money? Whether it’s DFCM or private developers, what will the next 12 to 24 months look like? And I think those are maybe the concerns that keep me up at night, financial, both from the client perspective and also the subcontractors. But again, I’ve got nothing but gratitude knowing that I believe this group, and this industry specifically in Utah, will emerge from the pandemic stronger than virtually any other state.