Most areas of the Mountain West seem to be recovering well from the pandemic downturn, with many market sectors showing resilience, including multifamily, warehouses, manufacturing, industrial facilities and distribution and data centers. Industry leaders also express great optimism for the passage of the new infrastructure bill.
“This bill will provide hundreds of millions each year to Colorado for roads, bridges, transit systems, water and wastewater projects,” says Tony Milo, executive director of the Colorado Contractors Association.
“Utah’s economy is strong. Nearly all sectors seem to be busy,” says Rich Thorn, president and CEO at AGC of Utah. “We anticipate this will continue through at least the end of 2021 and well into 2022.”
AGC of Colorado President Michael Gifford concurs: “The Colorado economy is recovering nicely as we enter the second half of 2021. Denver airport activity is up 55%, and net in-migration is still strong, driving residential construction demand.”
Still, it’s no surprise that leaders from nearly all contracting firms across the region cite three major areas of concern beyond the health and safety of their employees—a dire lack of skilled workers, increasing materials prices and ongoing disruptions to the supply chain.
“We continue to struggle with finding people to fill available positions. This is for all trades,” Thorn says. “People and companies are also closely watching supply chain issues.”
Some leaders take those concerns even further. “The materials shortage is real. Schedules are developed around materials availability, not necessarily when a project needs to start and finish,” says Tom Horsting, EVP and chief operating officer for Adolfson & Peterson.
ABC Chief Economist Anirban Basu reports that construction materials prices are 23.1% higher nationwide than a year ago, while nonresidential construction prices increased 23.4% during that time.
“We can’t hold out on materials pricing in hopes that costs will lower. It is our responsibility to communicate the importance of pre-purchasing to our clients,” Horsting adds.
The good news is that so far, at least, backlogs seem to be steady. “We feel fortunate to be positioned with a strong pipeline of projects this year and beyond, with excellent prospects for a full long-term recovery across the industry and in all of our major markets,” says Dennis Cigana, chief development officer at Jacobsen Construction Co.