Commercial Construction Set to Rise, but Will Enough Experienced Workers Be There to Handle Demand?

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As 2013 draws closer, construction and design experts predict next year will see an overall increase in commercial building activity. However, they also worry that the construction and architecture industries will have a hard time finding enough experienced workers to meet the rising demand.

A recent episode of the “Commercial Real Estate Show” took an enlightening look at the issues confronting the construction, development and design sectors. My guests and I discussed a range of topics including in-demand property types, construction costs, sustainability and tips for successful construction projects.

It’s not exactly a newsflash that the construction and architectural industries took a beating during The Great Recession. However, I was pleased to hear my guests say that, overall, demand for their services from the commercial real estate industry is rising, however modestly.

Kermit BakerThe United States has experienced about a 2 percent increase in non-residential building activity during the past year and should see a roughly 6 percent bump in 2013, said Kermit Baker, chief economist for the American Institute of Architects.

However, while the overall activity number is increasing, there is a “lot of variation” in how individual sectors are performing, Baker added. “Some segments are doing pretty well, while others are really still in recession mode,” he said.

For example, hotel and motel construction has increased 25 percent in the past 12 months, while the building of worship facilities has dropped 17 percent in the same timeframe, he said. Apartments, data centers and senior-housing facilities also are seeing significant building activity, my guests noted.

In particular, the senior-housing industry would appear set for a long-term construction boom. The enormous Baby Boomer generation is approaching its retirement years (the oldest Boomers turned 65 last year), so demand for these kinds of facilities should only increase in the decades ahead.

I also noted that we could see a proliferation of distribution centers in the coming years as e-commerce firms reconfigure their supply chains to be closer to their customers in major metropolitan areas.

Help Wanted

Because the construction and architectural sectors have been so depressed for the last half decade or so, many experienced workers left the industries in pursuit of more in-demand careers, leaving those still working in the sectors with the significant challenge of finding the right people to handle what should be a rising workload.

Bill Bland“We’re looking for seasoned individuals,” said Bill Bland, a senior vice president with Choate Construction. “Because so many people left the industry, trying to locate experienced workers, in particular pre-construction experts, is difficult.”

Other guests echoed similar thoughts. “What we’re hearing is that if you’re looking to fill entry-level positions, that’s not a problem,” Baker said. “But if you’re looking to fill a more experienced project-management position, maybe a design-team leader or something like that, that’s a bit trickier.”

Green Is Here to Stay

Bill HalterSustainable design and construction is a trend that has taken a permanent hold, noted Bill Halter, director of corporate design for the Cooper Carry architectural firm. “Our clients today all want to talk about sustainability,” he said. “They see the value in it, from a building operations side.”

“They may not want to do a LEED-certified building,” he added. “They may not want to go to the [U.S. Green Building Council] and go through [its certification] process, but they do want it to be a high-performance building.”

Get Everyone Involved Early

All my guests agreed that getting both the design team and the construction contractor involved in a building project early greatly increases the chance of a successful project.

“The most successful projects by and large are the ones in which we are involved early in the process with the designer and the owner,” Bland said. “[It’s important] to have a contractor there to look at constructability issues, to look at site selection.”

“[Bland] is spot-on,” Halter immediately concurred. “We are seeing very few design-bid-build projects, and we have actually encouraged our clients to engage the contractor early for the reasons Bill [Bland] has mentioned.”

Bland and Halter also touted the benefits of building information modeling (BIM), which is the production of a virtual, three-dimensional building model prior to construction. Such a model gives the designer and the construction firm a chance to pinpoint potential problems before any ground is broken and to work together to resolve those issues.

“We can see an issue now versus seeing it in the field, which decreases change orders, which makes the building cost less,” Bland noted.

 

The entire episode on construction, development and architecture is available for download at www.CREshow.com.

Michael Bull, CCIM
Show Host, America's Commercial Real Estate Show
Info@CREshow.com

President, Bull Realty, Inc

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