Early this year, when United Construction ordered roof joists, the Reno-based contractor’s lead-time on the load-bearing wooden planks would be about four months. Months later, in mid-April, the length of time between ordering that product and seeing it on a job site has more than doubled. “If we ordered joists right now, our lead time is nine months on those same joists,” Michael Russell, CEO of United Construction, said in a recent phone interview with the NNBW. “There’s a lot of market pressure being developed within the material supplier arena.” It’s one of the many issues the construction industry in Northern Nevada and beyond continues to navigate since the coronavirus pandemic threw a wrench in the economy more than a year ago. From project delays to rising supply costs to contact-tracing COVID cases, Northern Nevada construction companies have not simply hammered away with their heads down over the past year. Like many businesses, they’ve scrambled, pivoted and adapted on the fly as the economy broke down and then, many months later, began to rebuild. With that in mind, the NNBW spoke with a quartet of contractors in the region to dig into how their industry has been altered, what pandemic-related challenges are lingering, and what opportunities lie ahead.
United Construction (Reno) — Michael Russell, CEO
Russell
Question: What is the biggest difference in how your company assesses a job now versus before the pandemic?
Answer: The biggest difference for us is to focus on communicating our policies and procedures for the COVID response with our customers and incorporating language into our contracts, which allows us to react in unnecessary manner. There have been a few COVID delays in some of our projects, nothing major. But we have had a few impacts on a few projects where people showed up to the job site, and maybe had exposures or came up with COVID. So, we’ve had to do all the things that you’d have to do when you get exposed — sometimes stop the work for a few days till we can contract trace and figure out who’s exposed, who’s been exposed, etc. Really, it’s just communicating with all of our stakeholders and making sure our customers are aware of some of the impacts when they occur. Q: What are the top challenges and opportunities facing your industry in 2021 and beyond? A: For opportunities, this year — and probably for 2022 — there’s a very high demand for new industrial buildings, which is the bulk of our type of construction. That demand has been driven by the acceleration due to COVID of more goods being bought online and having to be delivered to people’s houses. That’s been driving our market sector property heavily. We’re as busy as we’ve ever been and we have more projects in the pipeline than we’ve ever had in terms of industrial. The main challenges we’re facing nowadays is steel and wood and plastic products have all become in high demand. Manufacturers right now have way more demand than they can actually manufacture and supply, so lead-time to getting materials to job sites is stretching out. In addition, there are cost escalations going on in the marketplace based on the inverted supply-demand ratio right now. And then thirdly, the top challenges and opportunities we have is finding and hiring quality people. Our business here locally is kind of limited because we have a small population. Companies like ours have to kind of sit back and balance our resources, because we can’t take on necessarily everything we get an opportunity to look at, so we have to look at our resources to make sure that we can perform the work without killing our people with overtime. So, that’s a kind of balancing act right now for a lot of companies here. Q: With the need for masks, social distancing and other measures, how do you address safety in the workplace differently now?
A: We follow the Washoe County Health Department and CDC guidelines. And additional to the traditional safety items, we also ensure the proper use of personal protection equipment, and social distancing, health assessments, proper sanitation facilities, and cleaning protocols. We’re reducing meeting sizes or changing locations to safely support larger groups, as well as additional documentation to record those efforts and support possible contact tracing as necessary. And we’re communicating that with our field staffs on a regular basis. Our field supervision project control teams are well-versed in these requirements; they’re on top of this stuff every day at the job site.
Miles Construction (Carson City) — Cary Richardson, Vice President & Senior Project Manager
Richardson
Q: What is the biggest difference in how your company assesses a job now versus before the pandemic?
A: From a COVID perspective, I think probably one of the main differences is that we’re seeing some gaps in the supply chain, and we’re seeing a lot of delays in international shipping. So, when we’re looking at projects that have very aggressive schedules to them, we really have to take a step back, to ensure that we’re going to be able to get the equipment that we’re going to need to complete the project. We always looked at that, but now it’s very specifically, what’s the COVID effect going to be on delivery dates, and the supply chain for all the pieces and parts that we need in order to construct this facility, and can we get it in time?
Q: What are the top challenges and opportunities facing your industry in 2021 and beyond? A: I think that the biggest thing that we’re dealing with right now is material escalation — the cost of steel and wood and other materials. We haven’t seen this type of material escalation since before the recession hit. As an example, the cost of the supplies of a pre-engineered steel building has gone up 38% since last summer. And escalations are happening at such an unprecedented rate and manner that it’s extremely difficult to hold project pricing and commitments to the owners. But, we’re seeing that there was a fair amount of pent-up demand from pausing for a year, and we’ve got, in general, a strong resurgence of people needing new facilities and expanding facilities; things that they had paused are back alive. And then we’re seeing a huge influx of California business. The amount of Californians that are relocating their business to here has always been strong, but it’s just completely off the charts. And we’re also seeing other companies that are relocating or expanding to the West Coast. And we’re seeing a really very strong resurgence of advanced manufacturing and distribution facilities in this area really fueled by the business climate in California. Those are huge opportunities right now in construction. Q: With the need for masks, social distancing and other measures, how do you address safety in the workplace differently now?
A: The real challenge in our industry is how you manage it in the field. That has been an ever-evolving challenge on how to manage that because the rules are ever-changing, and although they change the rules and the requirements, nobody comes to you with the solutions or ways in which to be able to viably execute what needs to be done and to satisfy the requirements. So, it really puts a lot of onus back on the individual contractors and safety officers to internally pool resources and come up with ways to do this safely and to do it in a way that can still result in us being able to build a building. It can make it very difficult for us to fast-track some projects, because you can’t flood an area with people, you can only put so many people in certain areas in order to maintain all the requirements. So, scheduling becomes an issue, some of the means and methods of how you physically put work in place have to be modified and done differently.
Brycon Construction (Reno) — David J. Smith, Senior Vice President & Division Manager
Smith
Q: What is the biggest difference in how your company assesses a job now versus before the pandemic?
A: Everything revolves around what COVID measures and what mitigation measures do we have to put in place to go about estimating that job and looking at that project. We have to look at the availability for materials that we would have for the project, because there seems to be lots and lots of shipping delays and material delays. When we look at the schedule that our project gives us, we have to evaluate the main materials being used — if it’s lumber versus steel versus other products. And we have to do a little bit of quick research and understand what are experiencing delays right now. And then we have to do a quick safety protocol on how we will efficiently do the work to complete it if it has a schedule given or if we have to provide the schedule. Because now we have to take measures. When we have workers working together, we have to social distance our construction folks as best as we can. Q: What are the top challenges and opportunities facing your industry in 2021 and beyond?
A: The biggest challenge we have is skilled workforce. So, whether or not COVID plays any role in that whatsoever, it’s been a challenge for the last few years, and it’s going to be the biggest challenge our industry’s going to be facing in the next coming years. Our second challenge right now is almost all COVID-related, and it’s all just material availability, material delivery and material supply on the site. There is, however, not a shortage of projects right now. In our Northern Nevada market, there’s a lot of manufacturing companies coming from out of state. They’re looking at Northern Nevada as not only a very appealing place to live and raise a family, but it’s an appealing place from a bunch of different business reasons. The other opportunity is multifamily. There seems to be a great multifamily market in the Northern Nevada area. And then I think there’s going to be a lot of public work coming on infrastructure, either through the new administration that’s coming in, and the focus that they have on infrastructure, or just the fact that Northern Nevada has needed quite a bit of infrastructure worked on for quite a while. Q: With the need for masks, social distancing and other measures, how do you address safety in the workplace differently now?
A: That’s been a huge challenge for us. We’ve had to take great measures. We try and follow all of the federal OSHA, Nevada OSHA regulations, CDC regulations, and try and maintain social distancing. For construction workers, it can get pretty tough; we have to exchange tools, sometimes we have to swap things out. So, we’ve had to take all kinds of different measures and put them into place. We use a lot of isopropyl alcohol. Before we hand tools off to each other, we have guys have to spray and wipe down hand tools or tools or before they swap them out with each other. Instead of two guys inside of a man-lift, we only have one, or if it’s a man-lift that’s big enough, we put a physical barrier in-between them. And we have to make sure that we don’t have anybody within 6 feet of each other for more than 15 minutes, and masks are always mandatory. There are daily temperature readings, and if we do have anybody that displays any COVID symptoms, then we have to put them into a quarantine. Then we have to go through and work on quarantining individuals that were working within a certain distance of them for a certain amount of time.
Helix Electric of Nevada (Reno) — Cody Kinnison, Vice President of Operations
Kinnison
Q: What is the biggest difference in how your company assesses a job now versus before the pandemic? A: The priority has always been the safety of our crews. The pandemic required us to take a robust safety program and augment it with COVID protocols such as social distancing, hand washing stations and regular health checks. When exploring new project opportunities, we must take this into account, and ensure that the contractor’s programs are in line with this and this can create a go or no-go scenario, as we won’t compromise safety. Q: What are the top challenges and opportunities facing your industry in 2021 and beyond? A: The biggest challenge now is the escalation of raw materials, along with the impact on transportation. We really need our supplier factories operating at 100%. In addition to that, the pipeline of employees coming into the industry continues to be challenging. And a lot of the youth coming out of school, they’re just not interested in getting into the construction industry.
The opportunities are really staying at the forefront of the construction industry — that’s a key factor. Here we have integrated our design build and prefab(rication) department, which reduces cost and labor constraints. We’re also committed to providing exceptional service to our clients, and these key factors help us achieve that goal.
Q: With the need for masks, social distancing and other measures, how do you address safety in the workplace differently now?
A: As mentioned above, safety has always been our top priority. Due to COVID, some additional measures have been implemented. We also place a heavy emphasis on “morning toolbox talks,” reminding our teams to follow the CDC guidelines and be safe. And we constantly have discussions with our employees to gain feedback on their experience during these times.
And the innovation that’s kind of come out of that, and just the openness of speaking with our employees, we’ve learned a lot. We’ve delved into a lot of cleaning supplies that we have that are in abundance on all of our projects, just really trying to ensure that our crews are safe.
Russell
Richardson
Smith
Kinnison