In our “uncertain economy,” how busy will the busy season be for contractors in the Great Lakes region?
Brian Turmail, Vice President of Public Affairs & Strategic Initiatives with AGC of America, said most contractors he knows aren’t worrying about a possible recession. Instead, they’re “pocketing the money while they have it.”
“We’re seeing good public sector demand thanks to the bipartisan infrastructure bill. We’re seeing private sector activity. We’re seeing a ton of multifamily, a decent amount of condo conversions. Some retail construction. Hospitality is coming back now that people traveling in larger numbers now. A huge number of data centers,” Brian said.
So, it’s a case of making hay while the sun shines.
Passing on change orders will be an issue
“Workers are eager for as many hours as possible. It’s gotten more expensive to fill up their Silverado,” Brian said.
“Most contractors realize they’re in a higher-risk business. Any moment, the market could change. The indicators look positive right now, for the most part, but we don’t know what the future will hold. If we could know that, there would be far fewer news channels devoted to predicting the economy.”
This summer, contractors will be working off their backlogs, so the question is not “will there be work.” No uncertainty there. The challenge will be passing on change orders to reflect changes in cost.
The key will be having a “heart to heart” conversation with each customer at the planning meeting, says Jimmy Greene, President of Associated Builders and Contractors chapter in Michigan.
“Ask, ‘What will happen if economic conditions change?’” Jimmy said. “A change order is a discussion. Before you put a shovel into the dirt, you have a discussion of why the caveats are in place. Contractors’ margins are a lot smaller than people think. They’ve got a lot of crew and a lot of subs and a lot of overhead. You can’t eat loss. There’s no sustainability in that.”
Less downtime between jobs
The key to succeeding in this year’s busy season—when many economists are predicting a recession, and some are predicting a recession akin to the Great Recession of 2008—will be moving fast between jobs.
“Working in covid gave contractors a new perspective on timelines,” Jimmy said. “Nothing is a given. Nothing is certain. The fact that you need to rush to the next job is on the front of everybody’s mind. We’re still in covid. There are still coronavirus numbers out there. We just learned how to work in an uncertain environment. We’re marching to a new drumbeat—and it’s a fast drumbeat!”
That is, the work on the job site occurs at the same deliberate pace. Safety first. But there’s less and less downtime between jobs.
That said, contractors’ backlogs could dry up quickly if a recession does hit. See: How to help your construction business weather a recession.
Using temporary labor in uncertain times
Companies that need to fill roles may not want to incur the costs of onboarding a permanent employee while the economy is unstable. Temporary staffing offers a great way to respond to fluctuations in the economy.
Hire quickly and easily through a temporary agency and if the economy starts to sour, you’ll be able to respond quickly. No hassles of permanent staffing. The costs of hiring, training, and even firing can drain businesses of money they can’t afford to lose.
A great choice in the Great Lakes region is Great Lakes Skilled Trades.
“You’ll gain access to a pool of experienced skilled tradespeople—and plenty of entry-level laborers—so you can quickly and easily fill spots that pop up,” said Steve Dubicki, Director of Sales for Great Lakes Skilled Trades.
A perfect example was the contractor who came to Great Lakes Skilled Trades to find night shift carpenters for grocery store remodels.
“He’d had absolutely no luck finding anybody,” Steve said. “Construction is pretty much a 7 a.m. to 3:30 p.m. business, so it was really hard to find willing qualified carpenters. We have five full-time recruiters at Great Lakes Skilled Trades and we put them on this task. They started attacking the phones. Within a week, we had 15 people for him.”
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