2024 Construction Outlook: Rachel York

York’s 2024 Projection: Workforce is a real issue and will continue to be. With the increased starting wage of entry-level workers into all industries, it’s hard to get somebody to come work for the same money when they’re out in the weather year-round. Addressing this problem will raise the cost of projects, and that’s the part nobody likes.

I’ve heard from some developers that they’re taking a wait-and-see attitude right now as they wonder what will happen with interest rates and demand this year. Are you noticing that, or are the ongoing ARPA-related projects keeping you hopping?
We’re still seeing the effects of the COVID-related funds and American Rescue Plan Act projects. We do a lot of projects with the public school systems and the universities, plus private sector work as well. Schools and universities still have a lot of things happening. On the private sector, it seems pretty steady, though the current bid calendar is looking a little bit lighter than it did last year at this time.

What’s your project load now, and are you anticipating it to continue at the same pace?
Our company’s trying to manage workload better. Over the last couple years, we had so much work that we struggled not to be overcommitted. In 2024, Donco 3 has the goal of finding our sweet spot. The last two years, the workload was intense – there was so much out there.

I read a pre-COVID McKinsey study that said 77% of construction projects are at least 40% late. How hard is it to schedule projects with so much work happening?
We’ve put into place some forecast programs that are helping with our scheduling, but there are a lot of unforeseen things that happen along the way, especially in the beginning of the construction process. We also struggle with ever-changing schedules due to weather and subcontractors ahead of us facing unforeseen conditions. We turn down projects due to the workload that we currently have and our future schedule, and that results in us getting pickier on projects we choose to bid.

Do tight schedules make it harder to deal with risks? How do you handle that?
This is a real challenge. A lot of things change throughout the whole entire project, not to mention the workforce shortage. A tight schedule makes any conflict hard to overcome.

Has the supply chain difficulty mostly ironed itself out, or are you still seeing delays?
For us, supply chain’s kind of ironed itself out. Equipment and materials are more readily available. The industry itself has compensated by ordering materials earlier to compensate for longer lead time. We just order ahead.

Workforce is an ongoing stress point for the construction industry, but is that area improving? What is needed locally to improve the problem?
Workforce is a definite stress point for the industry. Is it getting any better? I would say no. Every industry is pulling for every available employee. I feel we need to get creative in order to draw more interest into the construction industry. Locally, what we can do is continue to raise wages in order to entice people to want to have a career in construction. If people know they can raise a family and do it well and retire by working in the construction industry, that would make it more appealing to work outside in the construction elements that we experience in Missouri. We work year-round, on 100-degree days and on 20-degree days. It’s nice when it’s 65.