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Sunday, 23 December 2012 23:13

Industry overviews: Construction and Architecture

Written by  MiBiz Staff
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Rex Bell Rex Bell PHOTO: Erik Holliday

Rex Bell
President, Miller-Davis Co.
We expect continued, slow and limited improvement in economic conditions in 2013. Economic uncertainty and consumer timidity persist in stifling significant growth. Since supply continues to far outweigh demand, competition will remain fierce. In order to achieve and sustain meaningful growth, business development efforts will be even more critical and new markets must continuously be sought. Fortunately, sales opportunities have been fairly robust, and if current trends continue, business will improve and opportunities for employment will develop.

 

Derek Coppess
Managing Director, 616 Development
In our experience, trying to predict macroeconomics doesn’t bring value. Instead, we create value with our vision, focus and tenacity for 616 Development’s mission to add as many market-rate apartments to the urban core, in our community-centric fashion, as possible. We, and other downtown developers such as CWD and Rockford Development, have been busy infilling the urban core over the past couple of years. Outside of the opportunities we find in the ‘sea of parking lots’ behind Van Andel Arena, I believe we are on a nice clip toward creating critical mass in the core. That’s kind of cool. As downtown becomes full, I believe development opportunities will begin spilling into outlying neighborhoods. With our waiting list growing and new units hitting the market in 2013, we will remain focused on educating and nurturing new residents toward practicing sustainable, community-minded urban living.

 

Tim Schowalter
President and CEO, Pioneer Construction
I remain bullish on the Michigan economy as our state becomes ever more business friendly. We should see modest growth in 2013 but there is still much apprehension in the air fueled by the dreaded “fiscal cliff” problem which looms over our nation. The commercial construction industry usually lags behind the housing market by two years and we’ve seen a slow yet real recovery in the housing market over the last year, so I believe commercial construction should see some real pick-up by 2014 if the country gets its financial affairs in order.

 

Dan Vos
President, Dan Vos Construction Company Inc.
I talk to some folks who say they are comfortable with their 2013 backlogs and others who say they are just getting by. We would be in that comfortable backlog category. We have been very fortunate to have had plenty of work this year and will finish 2012 as one of our most successful to date. I don’t think this is indicative of the economy in general, but I do see it as a good indicator of the markets that we serve. We have done lot of hiring this year so I don’t anticipate a great deal of growth along those lines. However, I do see growth with regards to investment in technology and equipment.

 

Mike Novakoski
President & CEO, Elzinga & Volkers Construction
We believe that Michigan continues to evolve while it grows out of the great recession, albeit recovery for the west side of the state appears stronger by comparison. We have seen a resurgence of the traditional Michigan manufacturing industry while also experiencing continued growth in new high-tech markets. As a construction company, growth in our business is directly related to the amount of investment businesses make in their physical space. Elzinga & Volkers will continue to tailor our services to the needs of rapidly growing sectors such as industrial, health care and senior care.

 

Mitch Watt
President, Triangle Associates Inc.
For 2013, I see a slight uptick in the number of construction opportunities becoming available in several of our market segments. Retail and industrial work is increasing. Health care facilities needs are high and forecasted to increase on a national basis. However, we believe growth in Michigan will remain sluggish due to a number of factors, including the completion of recent major expansions. For K-12 education, needs are high and many districts are planning again but successful milages are limited and the size and number of bond requests continues to be low. The trend continues to be on small projects focused on maintenance and “warm, safe, dry.” We see limited growth in multi-family housing and commercial office, in part due to the economy, bank financing and tax incentive limitations. In general, the construction industry continues to be challenged with enough work to keep companies fully utilized. This competitive situation for work will see a continuation of very tight margins for construction firms and subcontractor defaults. While challenges still exist, we do remain optimistic that there are growth opportunities available.

 

Tom McGovern
President, Rockford Construction
We are pleased to see continued confidence and increased construction volume in our economy. As we approach 2013 our backlog is much better than in the past several years. This has been a year of expanding our team and focusing much attention to hiring excellent talent. We are very attentive to our internal training and process improvements. We are especially proud of the growth of our general trades division. Our goal is to continue to invest in our core construction practices, which ultimately need to produce the results our clients expect. Smart buildings and the desire to validate building performance is creating continued advancement and will be a new focus point for construction. The volume of dark properties and space will continue to be the focus of developers and owners. Ultimately, the generational shifts that have increased demand for more residential space in our city will create need for other supporting service providers. New tenants will continue to demand sustainably-built space that is energy conscious.

 

Rick DeKam
Principal, Midwest Realty Group LLC
I really don’t know what 2013 holds in store for us in business. Typically our business winds down somewhat over the year-end holidays and through the majority of the winter, which is consistent with our current work trends, but next year is anyone’s guess. I think a lot will depend upon whether or not the Democratic leadership will get serious in addressing the issues creating this year-end ‘financial cliff’ and beginning to work from a more reasonable balanced budget or whether government spending will continue at an irresponsible rate well in excess of our budget. Until this issue is resolved to the satisfaction of corporate America, I fear that our country is destined to slide back toward another (or continued) recession, or at a minimum, a stagnant economic future.

 

Bradley Thomas
President & CEO, Progressive AE
We are entering 2013 with significant backlog and forecast for continued robust growth. Health care has seen significant activity in this market, but different from pre-recession activity. There is significant activity across all types of multi-unit housing (senior, student and low income). Corporate workplace activity has been strong and continues appear strong into 2013. We are seeing institutions of higher education competing for students, in part, through quality of student life and amenities. Alternative and renewable energy growth has been moderate, slowed in part by recent decline in natural gas and energy costs. National retail is seeing a shift from big box to more convenience store and quick service restaurants. Financial institutions appear to be reinvesting in facilities again. Public sector spending (local and state) has been softer in 2012, and we are not anticipating significant growth in this area in 2013 despite aging, deteriorating infrastructure.

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