With the election this week, I am curious about what I will watch on TV from now on? I could watch VEEP, but fiction isn’t quite as interesting as the reality of this election cycle. I could watch reruns of the Office or Seinfeld, but they make me feel my age. Maybe I will just read more? On a serious note, North Carolinians in construction are facing some questions about what is next.
According to the Bureau of Labor Statistics, North Carolina’s construction unemployment rate in August was at 4.9%, which ranks 10th in the nation and among the tightest in the US. The battle for talent is real. Shiel Sexton’s regional revenues are up 170% in 24 months and we are not alone. Most contractors are experiencing a growth spurt.
Labor availability is non-existent for our subcontractors. The good subcontractors just make everyone work harder because there is a scarcity of labor at every level. Finding high quality management talent is a constant challenge because good people command top dollar. Recruiters are bombing my LinkedIn account and voicemails daily. My best tool for recruiting is to find someone who lives somewhere cold who is willing to relocate to the beauty of the Carolinas. But growth will moderate – we just don’t know when.
The election may or may not influence growth. I thought the procurement cycle would have cooled off this summer in the lead up to the gubernatorial chaos among us. But that did not happen. We are still experiencing a lot of inbound requests for pricing and proposals. A newly elected president often leads to tepid investment because there is greater uncertainty than with an incumbent leader.
HB2 continues to headline the news cycle. Surprisingly, NC Commerce Secretary, John Skvarla, recently espoused about HB2, “It hasn’t moved the needled one iota,” in our State’s ability to recruit new business. Irrespective of where you stand on this issue, it is cognitive dissonance to pretend that North Carolina has not suffered from the legislation. It has impacted our future prospects for corporate investment. Will this standoff be addressed post-election?
People I network with (developers, architects, competitors) suggest that activity will continue to be robust through 2017. Relatively speaking, the US economy is outperforming the world, but there likely will be a reckoning. As much as I do not want activity to slow, it will do so and the buyers will benefit. We are often bumping up against construction buyer’s proforma thresholds because our costs are way up. The unintended consequence of a hot market is that it sometimes results in an owner pulling the plug on a deal because it is too expensive.
So if you are reading this today, get out and vote. If you read it later, let me know what you see on the horizon, or give me a good book to read.
The Messenger Newsletter | November 2016 | Shiel Sexton Carolinas