Most specialty contractors across the region say their backlogs are healthy, and they expect solid industry growth to continue through 2020, barring unexpected political and economic upheaval.
“Heading into 2020, the local construction market continues to be robust, and the main challenge facing the subcontracting community remains a trained and qualified workforce,” says Debra L. Scifo, executive director of the American Subcontractors Association of Colorado.
That confidence is somewhat at odds with industry forecasts, which predict that 2019 activity will finish well behind last year. A recent report from the Leeds School of Business at CU Boulder says that nonresidential starts in Colorado will end 2019 at $4.7 billion, down sharply from $7.9 billion last year. Nonresidential starts will rise in 2020 to $6.4 billion, still well short of recent peak years, the report says.
In Utah, megaprojects such as the $3.6-billion replacement of Salt Lake City International Airport terminal are still underway, work on the new state prison is ongoing and building for tech companies in Utah County continues at a robust pace. The state also had a nearly $1-billion budget surplus earlier this year, giving designers and builders there even more reasons for optimism.
“The 2020 nonresidential construction outlook mirrors much of 2019. There are hints of a fourth-quarter minimal slowdown, which should tick up again or hold steady moving into 2021,” says Chris DeHerrera, president and CEO of the Utah Chapter of Associated Builders and Contractors.
Urban areas in Idaho, Utah and Colorado are still experiencing near-record growth, increasing the need for better infrastructure. “We need to continue to build infrastructure to support that growth, and that gives us optimism about the strength of the construction market in 2020,” says Willis Wiedel, president, Encore Electric.
Even so, some market sectors are down. “Although certain markets are beginning to slightly soften, others are continuing to grow,” says Nate Otterson, vice president, Colorado operations at Hunt Electric.
Seth Anderson, CEO at Weifield Group Contracting, also sees some slowing. Some markets, he says, “won’t be as hot as in the last few years … but these are the times when the relationships we have will help us get to the next level, so we are anticipating growth.”