Building to be Strong into 2011

Oklahoma’s construction industry will maintain its current level of activity into 2011, said Dick Anderson, executive vice president of the Associated General Contractors of Oklahoma.
“Any business with foresight is having trouble keeping up with the work,” Anderson said.
Construction has grown so rapidly this decade that today it represents more than 8 percent of the state’s gross product.
Business is coming from public works jobs, tax-funded entities, public and private universities and colleges — what is referred to as institutional jobs — and non-profits, which are everything from health care to churches.
It has been an interesting period in the industrial construction arena, Anderson said. Dating back to WWII, a typical construction boom runs 13 years, he said. The current up tick is about 10 years old.
“This cycle is applicable to the commercial market and deals with the sub segments within it,” Anderson said. “The residential market and the heavy highway have different factors affecting them.”
According to U.S. Department of Labor – Bureau of Labor Statistics and its State of the Construction Industry 2002 – 2012, construction is the only goods-producing sector in which employment is projected to grow.
Construction, with 7.7 million wage and salary jobs and 1.9 million self-employed and unpaid family workers in 2006, was one of the largest industries in the U.S., according to the BLS.
Construction has maintained the most consistent job growth. About 64 percent of wage and salary jobs in construction were in the specialty trades, primarily plumbing, heating and air conditioning, electrical and masonry. Around 24 percent of jobs were mostly in residential and nonresidential construction. The rest were in heavy and civil engineering construction.

Work Load
Construction that needs to take place during the next 10 years is staggering, according to the Associated General Contractors (AGC) of America in a recent article published in “Construction Trends: Education” by Dr. Bradford Sims. He is the construction management director at Western Carolina University.
The U.S. will need to replace 375,000 bridges as part of $360 billion spent on roadwork. Mass transit will need $72 billion worth of construction. The nation’s infrastructure will use $3.3 trillion in construction and related services. And, one-of-three schools will need repair work or renovation to the tune of $60 billion in construction.
In Oklahoma, the amount of money in the construction pipeline is in the billions. The size of individual projects has expanded, too, Anderson said.
“A decade ago, a big job was $10 million,” Anderson said. “That number is now $50 million and there are a bunch of $100 million deals.”
One big project that got away was the river tax vote last fall, Anderson said.
“Unfortunately, that $282 million deal did not go through. Tulsa has not seen that size in 50 years.”

What’s Hot
Across the state, health care construction leads the way, Anderson said.
“There is an aggressive building campaign going on in Tulsa and across the state,” he said.
Part of the building is related to what he called “boutique” or specialty hospitals — heart, bone and joint and cancer. Some facilities are private but many are affiliated with major hospitals.
In higher education, millions are already appropriated and the bonds have been sold on projects, Anderson said.
Oklahoma State University-Tulsa alone has a $500 million agenda.
The University of Tulsa has $59 million either in progress of planned.
The University of Oklahoma-Tulsa is adding a $7.5 million facility to its 41st Street and Yale Avenue campus.
Projects that are in planning stages and those under way need qualified construction workers, Anderson said.
“But, these workers must come with at least basic training,” he said.
Yet, the number of people entering the construction industry as a career option is declining.
Labor is a concern in all areas of construction — industrial, institutional, public, commercial and residential.
“Finding quality labor — people to do the work – continues to be a problem,” Anderson said. “Because the construction industry has stopped training people.”
The issue is that for decades people have looked at construction as a career choice of last resort, he said.
“We failed to realize that we will always have to have people to finish concrete, frame a house, swing a hammer, erect the steel and pull the wire,” he said.
The flip side is true — wages are going up for the qualified and trained workers.
A concrete finisher earns up to $50,000 a year.
Anderson admits there could be a slow down, but not as severe as in the past. It is because construction management is more sophisticated in business dealings than in the past.
“They are not the rednecks that you think of from years ago,” he said.
They have training and education in business law and marketing and economics.
“They have had to learn business development techniques in order to do their dog and pony shows using PowerPoint,” he said. ?

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