AGC survey finds project delays, labor shortages worsening for construction
The results of the survey, which polled more than 2,000 firms between August 4 and 26, underlined the downtrodden outlook at many construction firms, which have seen their backlog of work diminish among a dearth of new project opportunities. They’ve suffered drops in productivity and increased costs due to COVID-19 mitigation protocols, which have compressed profit margins.
“I’m more pessimistic than I like to be,” said Ken Simonson, AGC’s chief economist during a virtual conference call announcing the results of the study yesterday.
The share of firms reporting canceled projects has nearly doubled since the survey AGC conducted in June, when 32% of respondents reported cancellations.
The challenges come amid perceptions of inaction on the part of lawmakers to address the mounting issues facing the construction industry, AGC officials said.
Asked during a question-and-answer session which political party would be better for construction in the November elections, AGC CEO Stephen E. Sandherr told attendees neither President Trump or Democratic candidate Joe Biden showed they would help the industry.
“I would say neither,” Sandherr said. “We have a Republican Senate, we have a Democratic House, and they have done nothing on this issue.”
Six days before legislators are scheduled to return from their August recess, Sandherr on Wednesday said AGC had proposed an infusion of $37 billion to the states to make up for revenue shortfalls that support transportation projects, but those pleas had fallen on deaf ears.
“We're in this political stalemate on this and many other issues that have an impact on construction markets, and everybody's out of town," Sandherr said. "So right now, I would say that neither party is working in AGC's interests.”
Doug Hacker, executive vice president at Lexington, Kentucky-based commercial building contractor Congleton-Hacker Co., one of two contractors on the call, told attendees his firm’s experiences were in line with the survey's results.
“We've seen roughly a half a dozen projects either slowed or halted during this period, and roughly another three projects that were stopped altogether,” Hacker said. He voiced concern about the lack of new projects coming to market, combined with his diminishing backlog.
“We're just burning that backlog off,” he said. In addition, he said the federal government’s $600 weekly supplement to unemployment checks had made it increasingly challenging to bring workers back to his shop.
“That unemployment benefit that was tacked on really hurt,” Hacker said. “Now that [workers] are seeing that the future is not that bright on the construction side down here, it's even harder to pull them away to where they've got to give up that unemployment, and risk possibly having to get back in line for it.”
Art Daniel, president and COO of Ceder Hill, Texas-based AR Daniel Construction Services, which focuses on infrastructure projects, said his current jobs, many of which are planned years in advance, haven't stopped.
But he was increasingly worried about what will happen down the road, especially since Congress hasn’t renewed the FAST Act, which funds highway construction, and is due to expire Sept. 30, just 23 days after legislators return from vacation.
“There's a growing sense that we're doing fine now, but we have some concerns about what's out there,” Daniel told attendees. “The bottom hasn’t dropped out yet.”
Simonson said that the industry and its supporters in Congress have their work cut out for them.
“I really think it's going to take a rebuilding of confidence on the part of the public and the businesses that we're not going to see another round of shutdowns," Simonson said. "I think the fact that some states opened up early and then pulled back, that's been devastating for people who are making long-term investment decisions.”
Hacker asked AGC to keep going on its legislative efforts to help contractors, so that contractors could help themselves.
“Just give us time to build confidence,” Hacker said. “I think confidence can spread quicker than this COVID, if given enough time.”
Anna Reynolds School planned renovation will hike up taxes for Newington taxpayers
Erica Drzewiecki Newington taxpayers will see their taxes increase by an average of $75 annually if the planned renovation of Anna Reynolds School moves forward.
That net impact wouldn’t be seen until 2023, according to school officials, who have asked the town to consider the project in a referendum on Election Day Nov. 3.
The project cost has been estimated at $35.5 million, but reimbursement from the state of Connecticut through a school building grant program is expected to bring the town’s projected cost to about $17.75 million.
Town Council has scheduled a Public Hearing for this Thursday at 7 p.m. on Zoom to hear public comment on the project before setting the bond resolution and the referendum date. Information on how to attend will be posted on the town’s website, at newingtonct.gov/virtualmeetingschedule.
“With Anna Reynolds being over 50 years old there are substantial needs to update the facility,” Superintendent of Schools Dr. Maureen Brummett told the Herald and Newington Town Crier this summer as details of the project were finalized.
The renovate-as-new plans call for an upgrade to the entire structure, rendering bathrooms and other facilities handicapped-accessible, replacing outdated plumbing, HVAC and electrical systems, and finally, installing a new roof, as the existing one has been a source of ongoing issues.
“If you followed the news or social media this past year or have children who attend Anna Reynolds you are probably familiar with the problems with the roof,” Principal Jason Smith told residents in a video presentation about the project.
Smith offered the public a virtual tour of the school before this week’s hearing, in lieu of being able to host an in-person tour for the public due to ongoing pandemic restrictions.
Classroom ceilings, learning materials and internet access were all compromised by water coming in through the roof. Repairs made by the town in early spring will sustain it for a period of two to five years, Smith said.
“That means a new roof is still a necessity,” he added.
The existing building is 61, 644 sq. ft., exceeding space standards. The footprint would not increase in the renovation, except for the addition of a handicapped-accessible elevator.
The Anna Reynolds Project Building Committee has continued its efforts, planning construction and working with firm Colliers International on the grant application, which was submitted to the State June 26.
JCJ Architecture is conducting an independent review of the facility as well, to ensure it qualifies for maximum reimbursement as a renovate-as-new project.
Pending approval by taxpayers in the referendum, the State Bond Commission is expected to make its award selections by the year’s end.