Regional Contractors See Market Strength Continuing Through 2020
The struggle to meet ever-shorter project schedules with a limited workforce continues to dominate daily life for most contractors across the region. Steady in-migration and an economic boom in Boise, Salt Lake City and along Colorado’s Front Range are driving demand for new projects as firms scramble to keep up with record growth in those areas.
“And that’s a good challenge to have,” says Rich Thorn, president and CEO of AGC of Utah. “2019 in Utah across all sectors is shaping up to be a good year, and 2020 looks pretty darn good, too.” Thorn cites statewide unemployment under 3%, ongoing megaprojects at the Salt Lake airport and more than $3 billion in work with the state of Utah—including a new state prison—as further reasons for optimism.
Cory Moore, national president, Big-D Construction, Salt Lake City, agrees. “We are surprised by the sheer volume of large projects in the marketplace,” he says.
“2019 is definitely shaping up to be a better year than 2018,” says Jeff Palmer, executive vice president at Layton Construction. He points to continued top-line growth and “a slight improvement” in margins.
“Our markets in Colorado are surprisingly strong and steady, with more blockbuster-size mixed-use projects being announced every month,” says Michael Gifford, president and CEO of AGC Colorado. However, Denver’s growing housing shortage is a potential problem, with at least 58,000 units needed in the metro area to meet current population growth, he says.
That growth is driving strong construction markets across the board. “Locally, the office market continues to be healthy, and the tenant improvement market remains robust as well, with many high-tech companies taking spaces in downtown Denver and Boulder,” says Tim Kretzschmar, vice president and Colorado division manager at Swinerton.
But “competition for work remains high,” says Ryan Schmidt, district manager for Denver buildings at PCL. His firm is focusing on “smaller and unique projects” and continuing to grow its infrastructure work, he says.
Neil Nelson, president of ESI in Boise, says the Idaho construction scene should continue to be strong for another 18 to 24 months, “although there are some signs of a slowing market.”