AGC of Utah Contractors Look Forward to More Growth in 2019
The outlook for the near future remained positive among members of the Utah Chapter of the Associated General Contractors of America as they gathered for their 97th annual convention on Jan. 24-26.
Drawing hundreds of members and affiliates to the Little America Hotel in Salt Lake City, the three-day event included awards for outstanding projects and individuals, an economic forecast, educational sessions and the installation of new officers.
Doug Welling, president of Salt Lake City-based Jacobsen Construction, passed the mantel of chapter chairman to Thom Morgan, owner and CEO of Morgan Asphalt, also based in Salt Lake City.
Welling said he was pleased with the chapter’s progress in the past year, especially in the area of workforce development. AGC of Utah President/CEO Rich Thorn noted the near completion of the association’s construction and design career track in Utah schools.
The program is similar to others for health care and aerospace that provide credit and professional credentials for students who complete courses and training during school.
“We still have work to do as far as letting kids in school know construction can be a viable and respectable career path and a way they can make a contribution,” said Welling.
Thorn and incoming chairman Morgan both said they are seeking to increase training opportunities for current and new members with a facility to be built near the association’s Salt Lake City headquarters.
“That is something we’ve been working on in the last year, and hopefully we’ll have more to say about that soon,” Thorn said.
Another Strong Year
Welling said most AGC members are coming off another strong year and have maintained record or near-record levels of construction activity.
“Right now, I’m optimistic about the quality of our economy in Utah. Our backlog (at Jacobsen) is at a record level, but beyond that we are trying to get an idea of what will be out there in 2021 and 2022,” he said.
Todd Hughes, president of Hughes General Contractors in North Salt Lake City, said the company has seen record volume in the past year and expects to meet or exceed that level this year.
“We are seeing growth in our private-sector work,” Hughes said. “We are doing more offices, warehouse and industrial buildings for equipment dealers. Our bread and butter is still schools and public work, and there are more of those on the horizon.”
Orem-based heavy civil contractor W.W. Clyde & Co. also had a record year, along with an expansion, according to President Jeff Clyde.
“We had a record-volume year, mostly due to the acquisition of Scott Contracting in Denver,” Clyde said. “They do many of the same things we do, and they also do a lot of residential site development. It was a way for us to expand into Colorado.”
Jim McGuire, sales manager for the Utah offices of Forterra Structural Precast, said the company has seen growth in the multifamily market, providing precast concrete decks for above- and below-ground parking structures.
“We’ve kind of grown out as far as we can along the Wasatch Front, so we’re going to have to start going up or underground, and that looks like a good market for us,” McGuire said. “We will be supplying exterior panels for three new (LDS) temples, and we’re supplying insulated precast panels for the new Facebook data center.”
Minneapolis-based Mortensen is currently building the 970,000-sq-ft facility in Eagle Mountain, Utah, for the social media company.
With major construction projects such as the $3.6-billion replacement of the Salt Lake City International Airport terminal complex moving past the halfway mark, work on the state prison well underway, explosive growth in building for tech companies in Utah County continuing, and the state entering the 2019 legislative session with a nearly $1-billion budget surplus, designers and builders in Utah have reason to be optimistic.
Utah’s economy is one of the most diversified in the country, and thus follows larger national trends more closely than in the past, said Natalie Gochnour, chief economist and senior advisor to the Salt Lake Chamber and associate dean of the David Eccles School of Business at the University of Utah, in an economic forecast she presented on the first day of the convention.
“Follow the nation. We sometimes like to think of Utah as this interior state that is a little different than the rest of the country, but there is now incredible correlation between the Utah economy and the nation,” Gochnour said. “We will soon hit the longest economic expansion in the history of our state and the nation.”
She cautioned against “animal spirits in the economy,” a phrase coined by economist John Maynard Keynes to describe reckless actions that may be driven by over-confidence in a strong marketplace. She also noted that because of the large amounts of federal land in Utah, the state can be overly affected by problems in Washington, D.C.
“The real crisis we have today is a budget deficit that is growing larger each year and a national debt that is larger every year,” Gochnour said. “The tax cuts passed last year were financed by debt, and it is debt that will have to be paid back at higher rates in the future. This is a real risk to our economy.”
Gochnour pointed out changes in the way consumer goods are shipped and distributed, which she said will have an impact on construction. “Everyone interested in the future economy should go look at the new Amazon Fulfillment Center and the new UPS shipping hub and the other distribution centers west of us, and you’ll see where all the commerce is coming together,” she said.
The two distribution facilities, 855,000 sq ft and 840,000 sq ft respectively, were completed last year by Sandy-based Layton Construction.
Gochnour said plans by the state to build a collection of similar warehouses and distribution centers known as the Inland Port may have stirred controversy but will ultimately be a great economic benefit to Utah.
She is similarly optimistic about opportunities for redevelopment of state land that’s currently occupied by the state prison. It will be moving in 2021 when the new facility is complete.
She said that construction growth in the state has recently slowed to 1.3% compared to 1.6% previously, but is still expected to remain robust.