How is the “uncertain economy” affecting contractors’ busy season?

July 5, 2022

In our “uncertain economy,” how busy will the busy season be for contractors in the Great Lakes region?

Plenty.

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.”

Did you like this post? Check out How to get referrals for your construction business

Do you need skilled trades workers? Contact us. info@greatlakesskilledtrades.com

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A group of construction workers wearing hard hats and safety vests are smiling.

Overcoming Common Challenges in Urban Commercial Construction

March 27, 2024

Urban commercial construction brings a whole set of challenges that contractors in the suburbs and rural areas never have to consider. But revitalization is extremely important for urban cores to survive and thrive, so these projects can be quite lucrative. Here are some common difficulties, along with tips to overcome them and remain on good terms with the neighbors. Tight Spaces In urban areas, there simply isn’t as much space to move around. You might have difficulty getting some of your heavy machinery to fit, or your subcontractors could be trying to paint an apartment the size of an average broom closet. Rise to the challenge by thinking outside the box. Carefully survey the entire space before you get started, and develop a detailed project plan in advance. Be sure to include entry and egress routes, alternative ways of getting things done, and even subcontractor schedules that minimize the number of people working in the same space at the same time. Local Regulations Many urban areas have byzantine construction regulations that are confusing and hard to follow. Take the time to research these regulations and understand what you need to do. Then, boil it all down into a simple, easy-to-read document that you distribute to everyone involved. Get to know the local authorities and find someone whom you can call whenever you have questions or concerns. Make sure your team members are ready to pivot if you find out that you missed or misinterpreted something significant. Always have a backup plan. Community Engagement Transparency can go a long way toward getting the local community on your side. Let people know what you’re working on and how it will benefit them. Explain why the project is happening, how long it will take, and whether it will impact their costs (such as taxes). If you’re redeveloping a historic building, be especially sensitive to the concerns of preservationists and meet with them separately to explain your plans. Noise Control You won’t endear yourself to the local community if you’re making a lot of noise when residents are trying to sleep. And remember, even if you’re working on an office building, there could be luxury apartments right next door. Use sound baffling measures to reduce noise. Whenever possible, work during daylight hours. Minimizing Disruptions No matter how careful you are, urban commercial construction projects are inherently disruptive to the neighborhood. But you can mitigate this with careful planning. Try not to block streets during morning or evening rush hours. Be considerate of any upcoming local events. Do your best not to interfere with vehicular or pedestrian traffic patterns. When you do need to create a blockage, be sure to put up signage and work as quickly as you can without compromising safety. Need a Skilled Trade Professional? At Great Lakes Skilled Trades, we specialize in connecting contractors with professionals in the skilled trades throughout the Great Lakes region. If you need a skilled tradesperson, learn more about our services, and then contact us today!