Local construction industry remains strong despite disruptions from inflation and COVID-19

BY KENNETH WITKOWICH, Alachua Chronicle correspondent

GAINESVILLE, Fla. – The local construction industry remains strong despite battling inflation and the effects of COVID-19.

Alachua County construction professionals agree that the future of the local construction industry looks promising. Paige Dabney, project manager at Watson Construction, said inflation is affecting business by increasing the price of items needed for daily operation, like fuel and raw materials.

COVID-19 has had limited effects on the business, as construction was considered essential and therefore did not have to shut down. However, Dabney said COVID-19 has created industry shortages in materials needed for construction jobs. There is also a shortage of dump trucks and heavy equipment.

“We have not slowed down any, so I would say yes, it is still as strong as it was pre-COVID,” Dabney said. “I think if anything is going to slow the industry down, it will be the upcoming recession.”

Watson Construction has increased prices due to high fuel costs and higher pay for employees, Dabney said. The number of employees has not changed since before COVID-19.

Dabney said she believes local construction companies will continue to stay busy as the University of Florida and UF Health attract people to the Gainesville region. The city will need to keep building and expanding in order to accommodate that growth, she said.

Dabney added that the business is looking for students who need internships or are looking for a job out of school; Watson Construction is always hiring, whether you have a degree or not, but the business is especially looking for degree-holding professionals for project manager positions and in the estimating department.

Raymond Issa, a distinguished professor of construction management at the University of Florida, said increased costs in the industry were the main effect of COVID-19 and inflation. According to the U.S. Bureau of Labor Statistics, since February 2020, the price of inputs (labor, energy, and materials) of construction has risen 46%. In the last month alone, the price change was 1.9%. The price of inputs to nonresidential construction has risen 46.4% since February 2020. In the last month, the price change was 1.8%. 

Since February 2020, the price of natural gas went up 517.9%, unprocessed energy materials rose by 236.4%, crude petroleum by 152.6%, steel mill products rose 124.3%, and iron and steel went up 97.4%. 

Demand remains strong, Issa said, and everybody that graduated this past spring was hired. The economy is supportive of new jobs and projects and the demand is there; he said he receives calls from employers looking to hire as many as 50 to 90 students. There is a strong demand, but the supply is always lagging, Issa said.

The college hosts biannual career fairs; the latest was held this past spring, where 110 companies presented to only 70 graduates, Issa said. Companies realize the importance of keeping a steady supply of students.

At UF’s construction management program, students learn how to cope with these economic conditions by learning to include escalation clauses in contractional relations, in which the owner and contractor enter an agreement to share the risk of price changes and supply chain issues. Strategies like this are increasingly important as prices change; for example, glass producers’ prices went up 40% in the last few weeks, Issa said.

Issa is the faculty adviser for UF’s chapter of the National Association of Women in Construction. He said inflation has not produced any negative impacts on women in the construction industry. Rather, the construction industry has diversified; last fall’s incoming class was 20% female, which, to Issa’s knowledge, is the largest number of females in the program’s history. 

The future of the industry is being built with virtual and augmented reality, scanners, drones, and artificial technology, Issa said, all of which will make the industry stronger and more efficient.