By Mark Buckshon
While there are some signs that rising interest rates and international conflicts are putting a damper on the economy, these challenges are offset by the flood of infrastructure funding and pent-up demand.
A report by Procore Technologies, Inc., although focused on the US, is still highly relevant to Canada – and Ottawa. The report, Top Civil & Infrastructure Trends: Today’s Industry Challenges and Opportunities, says that about 78 per cent of civil and infrastructure construction firms expect their project backlog to increase or remain the same over the next year. It indicates that labor shortages and productivity challenges could undermine their project success.
These observations remind us of the construction industry’s paradoxes. The business is highly cyclical, and just when you think things can’t get more difficult, another wrench is thrown into the works.
In hard times, competitive pressures and competition for fixed-bid contracts push prices down so low that the only ways contractors can make a profit is by being extremely creative and resourceful in achieving project efficiencies; or (for those with a more negative view of the industry), playing games with change orders and/or stiffing or browbeating subtrades and suppliers.
In good times, labor shortages, inflationary price increases, and sometimes poorly qualified “low price” competitors mess up the marketplace, burning holes in project margins.
Impressively, however, I have observed the incredible resilience of general and sub-contractors, suppliers, and professional services through 35 years of publishing construction industry news. Sure, there are messy and expensive flame-outs and failures, but some of the biggest names within the industry when I started publishing in 1988 are still around today, and thousands of individuals have achieved satisfying, lifetime careers.
The good news is the industry is built on resilient and resourceful individuals and businesses. We’ll get through the difficulties and challenges and continue building for the future.
Mark Buckshon is president of the Construction News and Report Group of Companies, which publishes Ottawa Construction News. He can be reached by email at firstname.lastname@example.org.