As new president of the American Institute of Architects’ Springfield chapter, John McNabb is focused on worker growth and retention.
2017 Projection: Labor shortages will persist and wages should tick up as a result.
SBJ: The Associated Builders and Contractors forecasts a slowdown of growth in the U.S. commercial and industrial construction industries in 2017. Do you agree? John McNabb: I don’t see the Springfield area having a slowdown in 2017. We will more than likely see even more growth. Anticipating interest rates will increase – owners and developers are moving more with projects now to secure the lower interest rates – we’ll continue to see the growth for the next few years. The owners want to do it now as opposed to waiting.
SBJ: What sector locally is gaining the most traction? McNabb: The multifamily residential, which is apartments, and the residential sectors are seeing the largest growth.
SBJ: What is your projection of construction backlog for 2017? McNabb: All of that is hindered on the labor shortage. It’s the kind of shortage that’s going to take years to build up. Quite a few people left the design and construction industries with the recession. With that, it’s creating a shortage in our area. Now that construction is growing again, everyone’s short on labor. And it’s not being replaced very quickly.
There is a substantial backlog from 2016 that a lot of people have and a lot of that will carry over into 2017, which will then lead 2017 to have larger backlogs.
SBJ: The U.S. Bureau of Labor Statistics reports construction job openings stand at a 10-year high and average hourly earnings rose above $28 per hour in 2016. How is this playing out on a local level? McNabb: Another reason we are having our labor shortage is because a lot of the larger markets, such as Kansas City and St. Louis, are paying much higher wages and so a lot people are going there to work. But with our shortage down here, eventually our wages will start going up, just to compete. I see (the increase of wages) starting now and continuing forward.
SBJ: How are contractors recruiting new workers? McNabb: Our firm, along with a lot of other companies in town, provides internships and other support to the architect students at Drury University and the construction management students at (Missouri State University). A lot of those students remain in the area after graduation, and that in turn, is helping us make up for the labor shortage. If those two schools didn’t have those programs in town, the shortage would be much greater.
SBJ: Oil prices are set to increase. How will that impact construction materials pricing? McNabb: There could be a general increase in material costs due to the increase in transportation costs, but I think that will be modest compared to the labor increases that we’ll see. Asphalt will be the most affected by oil prices.
SBJ: How will the construction market impact consumers? McNabb: There has been an increase in both retail and office construction this past year.
This will lead to businesses being able to offer more services and other opportunities to the local consumers.
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