Markets

Southeast Leads Construction Trends in Markets, Technology and Labor

Southeast contractors have experienced a pendulum effect since the end of the recession, with swings between private and public sector development. This seesaw is a call to action for construction executives to be versatile.
By Frank W. White III
November 9, 2018
Topics
Markets

“The only constant is change” is an adage that could have been written for the construction industry. The industry has seen many ups and downs in the past 10 years and the current climate for construction in the Southeast United States demonstrates several emerging trends.

What construction executives in the Southeast experienced in the years since the recession is a pendulum effect, with swings between private and public sector development. This see-saw is a call to action for construction executives to be versatile.

As the real estate business started to emerge out of the recession in 2011, the public sector was still waning. Seven years later, the public sector is starting to outpace the private sector in the Southeast, with demand for schools (K-12), public safety (police and fire stations) and municipal parks. Multifamily building continues to grow—partially attributed to rising mortgage interest rates that are making renting a better option for consumers in some metropolitan areas—not only in the Southeast but across the country.

In 2020, the biggest population of Baby Boomers will turn 75, which is the average age when retirees move into senior living facilities. The size of this market will be very influential. The Southeast is considered “living in paradise,” and Florida is particularly attractive with no state tax, a relatively inexpensive cost of living and lower property tax (despite higher real estate prices). However, not every senior citizen is prepared to uproot and move south, so the demand for senior living should see an uptick nationwide.

On less-of-a-bright side for the construction industry in the Southeast, and many parts of the country, is the limited availability of skilled workers and tradespeople—a hangover from the recession when there was an exodus from the labor force. Right now, construction executives need to focus on developing a versatile workforce that can fill current needs and allow mobility in the organization during market fluctuations.

The other area that has been an industry challenge in the Southeast since the beginning of time is the impact of hurricanes; the recent experience in the Florida panhandle and the Carolinas has been no different. The ability for construction executives in this region to be reactive in the face of disaster is legendary. However, in other parts of the country, snowstorms, fires and other natural disasters wreak similar havoc. The lessons the U.S. industry can take from the Southeast is that these storms often spur the implementation of new building codes, which creates new avenues for opportunity.

No matter what is currently happening in specific geographic markets, all construction executives need to embrace technology, because it is truly essential to the future of the industry. There are four areas in which improved technology is a key asset:

  1. expanding the use of BIM on projects;
  2. robust project management software that applies technology to every aspect of the construction process, on the jobsite and in the office, and improves the communication process for internal and external users;
  3. executing and storing contracts and other documents electronically in the cloud; and
  4. replacing traditional aerial photography with drones.

Construction executives have an opportunity to take leadership in ensuring these processes become industry standard across the board and across the country as soon as possible.

With so many factors driving construction—the economy, budgets, supply and demand—the one factor that keeps moving construction companies forward is the ability to handle projects in diverse sectors and to stand out in each. For example, Kaufman Lynn Construction was recently awarded three 2018 Eagle Awards for Excellence in Construction by the ABC East Coast Florida Chapter for a municipal complex, multi-family apartment buildings and its new office headquarters.

While the construction industry in the Southeast demonstrates many nationwide industry trends, each local and regional company will need to be versatile in addressing its own unique market changes. For contractors in the Southeast, that means staying ahead of competitors by focusing on associates and corporate culture. Even the top construction leaders are only as good as the associates it has representing the firm to its clients.

The formula for success is to provide an environment that allows associates to grow their careers, challenge them with a diversity of projects in several geographic areas and recognize their individual success—as well as their part in the overall growth and success of the company. That’s a southeast trend worth following into the future of the construction industry.

by Frank W. White III
Frank W. White III is the President of Kaufman Lynn Construction. Established in 1989, Kaufman Lynn Construction (KL), headquartered in Delray Beach, Fla., has approximately 170 employees in Florida, Texas and North Carolina. KL is a full-service commercial construction company with extensive experience in the following market sectors: multifamily housing, office, senior living, hospitality, government/public safety, education (K-12 and university), health care, self-storage, industrial, parking garages, cultural, Recreation and faith-based/non-profit.

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