What to Expect Going into Spring Construction Season
At a recent board meeting of the CRE Summit, the general conversation was focused on one key issue:labor.
Existing Labor Force
No surprise with an 3% unemployment that getting skilled labor on the job remains a difficult issue. But this year it is going beyond that.
• Highly skilled trades are not showing up to job sites. • The bidder list has gone regional to national without many responders. • Many bid responders have requested not receiving bids for 6 months, even a year. • The job cost of local labor increases is coming up to meet the cost of bringing in labor from other parts of the country. • Many jobs have gone from bid to negotiated. • There is no schedule float.
Light at The End of the Tunnel
While the 2016 construction season is set to see rising prices and tough labor issues, it is far
from doom and gloom.
There are 2 of the largest construction projects ongoing in the country. Both the Google and the Offutt projects are using a lot of talent. As these projects continue, this is good for all vendors and subs in the area.
The Omaha area also has billions of dollars of building projects on the boards. Much of this is in the pipeline to build or is waiting for the labor market to stabilize to go into production. The business need, the money and the planning is there.
While the labor force issue is as bad as some have seen it, the good news is there are more enrolled in construction services at the universities and trade schools. UNO alone reported their spring appraisal class is usually around 40 students is at 109 this spring. The training of the next wave of labor is the key.
What We May Expect
Probable cost increases. Jeopardy to miss schedules. Growing pains.
This is not unusual or unexpected for a growing, vibrant community. At Smith Slusky Law, this is exactly what we expect to happen in a commercial real estate growth curve. Explosive growth exposes limited resources, driving up certain costs and creating development/management opportuinities. The attorneys at Smith Slusky are driven to help our clients navigate the development deal to maximize project potentials.