Construction Industry Trends: September 2021 Roundup

Though it looked for a moment as if we might get the passage of a construction infrastructure bill before the end of September, votes on the $1 trillion-plus package were twice delayed. The latter delay came as House Majority Leader Nancy Pelosi could not guarantee enough votes to bring it to the House floor for a planned Oct. 1 vote.

The infrastructure bill has been hotly debated, but it has further been tied to a larger spending package that could address everything from climate change and healthcare to social issues and minimum wage. That larger bill has been proposed for as much as $3.5 trillion, though scaled down versions of that plan were as low as $1.5 trillion. Some progressive members of the Democratic Party have said they would not support the infrastructure bill unless the full $3.5 trillion spending package attached is also approved. This, and the expectation that many Republican leaders in Congress would vote against both bills for being too costly meant Pelosi could only delay the infrastructure measure. The Senate, however, passed the infrastructure bill in it’s chambers by a 69-30 margin nearly two months ago. 

The Takeaway: These delays are unsettling and frustrating, but hope remains high that all parties can work together to pass the infrastructure bill. It’s one of the most important measures needed for the country, as thousands of roads, bridges, utilities and other public infrastructure are in dire need of repair and replacement. As Stephen E. Sandherr, CEO of the Associated General Contractors of America (ACG) stated in late September: “This is the kind of infrastructure bill that Democrats and Republicans have been promising to pass for years now. Failing to pass this measure will create new challenges for the economy.” In the meantime, contractors continue to modernize their operations to meet the complex demands of the scores of projects expected to come from federal infrastructure funding.

Though the wait continued in September on funding for new infrastructure work, many other large construction mega-projects (infrastructure projects among them) have broken ground this year—showing evidence that the construction industry continues to rebound from the COVID-19 pandemic. Construction Dive recently featured a list of the seven biggest new projects:

• A $2.1 billion oil line replacement project in Minnesota
• The $1.5 billion construction of JP Morgan Chase’s new office tower in New York City
• A $1.45 billion expansion of the Diamond Green Diesel Port Authority Refinery in Port Arthur, Texas
• The $1.2 billion construction of the Ohio State University’s Wexner Medical Center in Columbus, Ohio
• The $1.18 billion Red River Water Supply Project in Washburn, North Dakota
• A $1.15 billion project in Mojave, Calif. to create the 1.1 GW Sanborn Solar Facility and Battery Storage; and
• The $1 billion construction of a new basketball arena for the Los Angeles Clippers in Inglewood, Calif.

The Takeaway: It’s great to see these projects and more underway. Larger, multi-faceted projects are great economic drivers for communities. But, as Construction Dive also points out in a separate deep-dive report, these mega-projects also tend to create unique challenges and often wind up costing contractors in their profit margins—with some even losing money. That’s why it's critical that contractors taking on these and other challenging modern projects have modern construction management solutions and workflows in place to help them address issues and track costs in real-time.

Construction Executive magazine published an in-depth feature—The War for Talent—in September that breaks down what many contractors already know: the COVID pandemic pushed an already challenging construction labor shortage to even greater extremes.

Higher wage expectations, lack of construction trade courses and skill-based training, demands by younger workers for modern technologies and automation and the explosion of tech-enabled career paths in other industries have all contributed to the shallowness of the skilled worker pool. The traditional loose nature of construction projects where crews are hired and let go based on specific project phases and needs has also contributed to a stigma that construction work is not always stable.

“Construction, like any industry, pays people based on the value of the skills they bring to the table,” said Rolf Bax, chief human resources officer at career resource Resume.io. “It can be hard finding general laborers for sites because so many companies treat these people as disposable. If you make it known that people who want to learn new skills will be given an opportunity to do so, you will start to see more people applying.”

The Takeaway: We’ve seen many contractors shifting from traditional construction workflows to more modern, tech-savvy approaches, and in doing so, are building out new tech-enabled career paths that are starting to appeal to the next generations of professionals. Using these technologies is cutting the need for the number of skilled laborers in the field. However, skilled tradespeople are still in demand, and the more efforts made at a grassroots level to find and train these folks—and retain them in the construction organization—the better success contractors will have in overcoming labor challenges.

Construction industry associations, organizations, contractors and even retailers are kicking in to address the skilled labor shortage. Home Depot, recently launched its “Path to Pro” program in Houston and other parts of Texas in an effort to help job seekers learn skilled trades in electrical, mechanical, plumbing and carpentry. And, at the end of the three-week program, graduates are connected to real-world contractors looking for workers to hire.

The Takeaway: Programs like these are essential to helping the industry overcome labor challenges and expands the pool of qualified construction candidates. It's great to see real efforts being undertaken to fill the gaps of skilled trade training in tandem with modernization of construction practices.

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