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Forecasting the Future

 

Life would be infinitely easier if we could tell the future. We would know what the safe bets are and when to say no to a risky project. However, we’ve yet to discover the secret to seeing the future and instead rely on our instincts, our experience, and our colleagues in the industry to help us navigate what’s to come.

Riding the Wave
Our economy is growing and we’re seeing a steady amount of growth on construction projects, but it’s fair to wonder how long the good times are going to roll. The Associated Builders and Contractors, Inc. recently hosted a Building Pipeline discussion in Kansas City, and the panel of industry experts weighed in on how long we can expect the boom to last.

The general consensus expects consistent growth through the next several years. Addressing the labor shortage will come into play as we collectively work to keep the industry momentum moving forward.

“The next few years are looking really good for our business,” said Marty Hoffey, business development manager at MW Builders. “One of our biggest challenges will be having enough workers. However, we’re making great strides in the area of encouraging youth to consider a career in construction as well as offering accessible training for the industry trades. Together, we can get there.”
 
Thriving Industries
As it is with many industries, construction work seems to follow a cyclical pattern. What’s up one year may be down the next. The nature of this business forces us to think years out and anticipate where we should focus. Fortunately, we have signs and indicators that help point us in the right direction. This can range from city demographics influencing market trends to nationwide trends like the rise of e-commerce. We take that information, as well as what we hear on the street, to help guide what we focus on next.

Focus on Health
With today’s aging population of Baby Boomers, we anticipate additional growth in this industry. This doesn’t just mean more hospitals. We have seen accelerated growth of ancillary businesses, including behavioral services and facilities around patients with multiple chronic conditions.

Distribution Centers
E-commerce will only become more dominating, which has resulted in the rapid growth of distribution centers across the country. The recent nationwide vying for Amazon’s newest fulfillment center only reinforces the trend.

Entertainment & Retail
While retail has been somewhat flat over the past few years, we expect it to rise as cities work to create an improved pedestrian experience. Boutique hotels and apartments support this trend and many cities are seeing a greater focus on urban revitalization, rather than expanding further into suburbs.

Building Business
You know the market and you’re ready to go after new work — but how? Anyone in business development will tell you that one of the most important factors in this industry is building relationships.

Chris Hafner, a partner at Davidson Architecture and Engineering, is a big believer in this approach. “You have to get to know investors and understand what drives them. It’s more than just a job. Get personal. Become friends. People want to work with people they like, so getting in front of them and developing a relationship with them is what will lead to more work,” he said.

In order to develop those relationships, you also have to make sure you get face time with those key people. Attending industry events and exploring the professional organizations in your area can be valuable networking opportunities.
“It’s more than just being there, you have to talk to people and listen for rumblings of what’s coming down the pipeline,” said Joe Perry, VP of development at Port KC. “You’ll be amazed at what you can learn simply by attending industry breakfasts, panels, and other networking events.”

Seeing the Future
Working in this industry with a crystal ball would be easier, but it wouldn’t be nearly as interesting. We are constantly working to better understand where the market is headed and doing our best to hedge our bets. We try to win more than we lose, but in this industry, we rely on a risk-intelligent approach. Fortunately, we lean on each other — our partners — for input and insight because at the end of the day, we’re all in this together.