Sometimes we volunteer for things and then realize just how difficult fulfilling that promise can be. Predicting what our industry will look like in 2021 is anyone’s best guess when faced with the effects of COVID-19, an unknown outcome of widespread vaccination, a new administration, issues related to trade, and the likelihood of international conflicts which will impact oil and commodities. I hope I will be lucky, my insights will be accurate and all you readers will comment about how smart I am!
Some growth markets are great for metal builders, but the labor shortage is still an issue
The above-mentioned challenges play out daily in every business in our country, especially for small business. Owner’s make decisions based on their level of confidence that if they move ahead with a project, they will be able to address the debt service incurred. While our company has been blessed with the largest year-over-year increase in our history, l am still cautious in how I deploy our resources to position us for growth, while protecting us should we experience another catastrophic downturn.
The good news is that some companies like ours are thriving in this new economy where the pandemic has created opportunity. To help prepare for this column, I spoke with Greg Pasley, Ph.D., CEO, BlueScope Buildings North America Inc. Pasley reports that the metal building market is strong and rebounding well, even after some geographies were impacted severely by COVID-19 shutdowns. He spoke of the role we play in supplying and building for essential industries, which was recognized early on, and the fact that metal building construction in much of the country has proceeded safely through the pandemic.
As mentioned above, certain market segments are thriving and are well served by metal buildings, such as pharma, warehousing, e-commerce, logistics, agriculture, food processing, data centers and many others. One word of caution: certain industries have seen dramatic upticks in sales due to the work-from-home wave. Some of these businesses will not fare as well when successful vaccine deployment takes place. Also, the expectation that continued increase in steel prices will occur until they approach the cost of tariff-laden imported steel may have a negative effect on certain projects.
The biggest impact to our continued growth is without a doubt the ongoing labor shortage and residual effects of COVID-19. In many respects they are intimately related. I suspect that tradespeople will be very reluctant and slow to respond to vaccine efforts and will continue to be a source of spread for some time into the future. No matter how safe we keep our job sites, we cannot impact our workers behavior off the job. Quarantine requirements due to exposure will continue to plague us well into 2021. Contractors with flexible, well-trained crews will fare better. Nimble teams adept at various skills are vital.
I predict that our typically slow-to-change industry will look very different a year from now. The companies that will excel are the ones who leverage technology to increase efficiency as our world continues to transition to a more virtual environment. With more of the upstream project team working virtually, we contractors must adapt so information runs seamlessly from owner thru design all the way to our field labor. This may have an added benefit of encouraging the tech-savvy younger generation into the trades.
Historically low mortgage rates and a heavy emphasis on spending time at home has had a positive impact on the residential market. Housing prices in many areas are certainly booming due to the flight from city life. With prices so high, it will be some time before these new homeowners can sell their new homes and return to the cities, further delaying urban recovery. We are seeing a huge influx of management level people formally employed in the New York City market seeking positions in our area. These people are facing significant pay reductions more in alignment with our pay scale in this area.
Art Hance has been owner and president of Hance Construction, Washington, N.J., since 2000. Hance takes great pride in his work and the numerous awards for the quality and complexity of his design and construction. He has held multiple leadership roles in the MBCEAand actively served on many committees. He is a well-respected Butler builder, often called to add his voice and expertise to committees and/or subject matter. He is a passionate voice for quality, safety, training and excellence.