The construction industry has been changed over time by technology, the economy and environment, but one thing remains: It is practically outsource-proof.
“They are not going to take our buildings and build them out of country and bring them back,” says John Priest, president of Crossland Construction. “There’s large job security.”
You have to have boots on the ground. Presumably those are the boots of nearly 150 Oklahomans that would cycle through a typical construction project during the course of its build. Additionally, with aging buildings and growing industries, the opportunities for construction in Oklahoma seem to have no end in sight.
“Construction is a huge part of our economy,” says Mark O’Rear of Manhattan Construction. He adds that construction is forecast to be a $2.6 billion industry in Oklahoma for 2012.
“Hospitals are continuing to update and remodel, as well as schools and higher education campuses,” says Dave Kollmann, president of Flintco.
Steady growth of the oil and gas industry in Oklahoma has also kept construction companies busy. Perhaps most notably, downtown Oklahoma City’s new and tallest addition, Devon Tower.
A $1 billion project like Devon Tower is a once-in-a-lifetime project, says Kollmann. Construction companies tend to be very diversified across market sectors. This allows them to quickly react to ups and downs across the economy, which is imperative for an industry so reliant on the growth of other industries to fuel business.
“We have made some significant strategic shifts into several business sectors– health care, power, automotive and oil and gas in particular,” says Steve Olson, group president of Boldt Construction. “These sectors are strong and may even get stronger with the election behind us.”
Recession Impacts
Typical projects, like construction of a new school building, average $10 to 15 million. And spending on public buildings like schools through passage of bond issues has kept the construction industry building in Oklahoma through the economic downturn.
“I feel like we’ve reached bottom, and we are starting to see there is a light at the end of the tunnel. And that light is not a train coming at us, it is actually daylight,” says Kollmann.
He adds the success of the construction industry from 2005 to 2008 was like Mount Everest’s peak. There was more work than the construction market infrastructure could handle. While this seems like a good problem to have, if you need 20 painters and there are only 10, you also have a dilemma, he says.
He expects a slow recovery for the industry to pre-recession levels, which he says is healthy.
“Level is the new up. That is the new definition. We are up under our new definition,” says Kollmann.
If the construction industry can predict the fiscal future, it does seem to be looking up all around.
“The projected growth for next year in the sectors that we work in is eight percent,” says Olson.
“The retail piece has started to pick up and that seems promising,” says Leslie Goode, director of marketing and business development at Timberlake Construction.
O’Rear is seeing more private money coming to the table. Manhattan Construction will transform the Osler Building in Oklahoma City into a luxury hotel for Ambassador Hotels.
“Money is as cheap now to get as it has ever been. That is great for building and building projects when the cost of money is so low,” says Kollmann.
Ripple Effect
Not only does the general economy impact construction, renovation or construction of a new building sends a ripple through the larger construction industry.
“The architects seem to be a lot busier. Certainly if they are drawing, we are building,” says Goode.
Once architects and engineers design a project, construction management companies get shovels in the ground. They coordinate 25 to 30 sub-contracting firms that complete the skilled labor required to turn drawings into brick and mortar.
“Subcontractors are the life blood of our industry,” says Cassie Reese, director of corporate relations at Crossland Construction.
Manhattan Construction, for example, is set to begin work on a $28 million, three-year, multiphase systems training facility for the FAA. They will coordinate the work of hundreds of skilled tradesmen and laborers that will do the plumbing, carpentry, electricity and drywall.
Innovation Creates New Opportunities
While much of this work has remained unchanged for generations, technology has streamlined and sped up the process. It has also created positions in the industry that did not exist even a few years ago.
Building Image Modeling (BIM), through which an entire structure can be built on a computer screen to see how it looks, functions and fits in with its surroundings has created a new set of positions says O’Rear.
Sustainability has been another area of construction to see expansion.
“It’s not just a fad anymore. It’s the way we do business,” says Kollmann. “We have a sustainability director right now. We didn’t have that five years ago.”
