Recapping is a lot easier than forecasting. Looking back to see what has been accomplished is based on what is here. Looking ahead to see what will be, is based on a lot of assumptions, what-ifs, dreams and conjecture. The first is concrete, while the second is often smoke and mirrors as seen through a cloud of wishful thinking.
At a recent meeting with reader-advisors from Texas Contractor we unrolled a short list of what we thought would be hot topics for 2014. On a national level these items included:
- Expiration of the Federal Highway Bill in 2014 and the loss of jobs as a result. The problem with short-term, stopgap bills is that they provide the states with the necessary funds to do more than stopgap maintenance. Serious improvements cannot become a reality. We are living with a transportation infrastructure that is decades old and in serious need of updating if we are going to remain commercially competitive on a global level. Additionally, the loss of construction jobs will, by some estimates, exceed hundreds of thousands.
- Motor Vehicle Fuel Tax expiring in 2016. The impact of this equation is obvious: No tax dollars = no funds for transportation maintenance and/or updates. In early December 2013, Representative Earl Blumenauer (OR-03) along with leaders in the fields of transportation, labor, commerce, and construction introduced H.R. 3636 The Update, Promote, and Develop America’s Transportation Essentials (UPDATE) Act. This bill would phase in a 15 cent/gallon tax increase over the next three years on gasoline and diesel.
“The gas tax hasn’t been increased since the beginning of the Clinton administration,” said Blumenauer. “Today, with inflation and increased fuel efficiency for vehicles, the average motorist is paying about half as much per mile as they did in 1993. It’s time for Congress to act. There’s a broad and persuasive coalition that stands ready to support Congress, including the U.S. Chamber of Commerce, National AFL-CIO, the construction and trucking industry, cyclists, professional groups, numerous associations of small and medium businesses, local governments, and transit agencies. We just need to give them something to support.” Scan below for full article.
- Skilled labor shortages have been a problem for some time with the condition being exacerbated by the problem with immigration. Many contractors point out the facts that “illegals” are willing to work. They are reliable, they are skilled, and they are willing to do the work when no one else will. Contractors have commented that while they comply with current regulations and don’t hire anyone without green card or suitable papers, their competition will.
- Creeping inflation and the resulting increase in prices for construction related materials and equipment. The lack of stability, especially with fuel prices, makes it difficult to project costs.
Contractors participating in the meeting voiced their concerns, which focused on:
Quality of workforce
Safety
Keeping the funnel full, i.e. the availability of work, especially transportation.
Workforce/immigration
Contract issues
Training
The workforce problem is more serious in different areas of the country and different segments of the industry. If the economy went into a rapid growth mode this situation would become more universal
FMI has recently released its 2013 report on U.S. Construction Industry Talent Development that is based on responses nationwide from a mix of general contractors and construction managers at firms of all sizes and specialties, including mechanical/plumbing and heavy/highway/civil. To view FMI’s full report scan below.
More than half of respondents report a shortage in skilled labor. As a war for talent begins, construction experts must evolve their methodology of searching for the best and brightest employees. First, construction careers must be made more appealing to women and minorities. Second, there must be an appeal to today’s youth through career counselors, career fairs and utilization of social media channels.
An industry, any industry cannot survive unless it has:
The need for its existence
The materials and equipment
The people trained and skilled to implement its execution
Construction is a very material, equipment and people intensive industry. Without any of these components its continued existence becomes jeopardized. Without construction the economy cannot grow and prosper.
What do you think? What concerns keep you awake at night? If you’d like to share your thoughts and opinions, please feel free to e-mail them to: GSitek@ACPpubs.com.
For fuel tax article: click here
For FMI’s full report: click here
This article appeared in the January 2014 issues of the ACP publications