The BOOM! is Back

By Joe Sweeney

Years in the making, a full-scale revival of the construction sector seems to be upon us—at long last.

Back in 2000, Ingram’s launched the Industry Outlook concept, a series of annual roundtable discussions involving top executives from key business sectors in the greater Kansas City region. The level of change in any one sector year to year can vary, but few sectors saw the kind of Wile-E-Coyote-Over-the-Cliff drop-off that the construction sector experienced after the national recession supposedly ended in 2009.

We cover a lot of trends in construction and development in this region, so we knew at the construction assemblies in 2010 and 2011 that any sunny views about an impending revival were somewhat forced and wholly optimistic. To be honest, there weren’t a lot of them expressed—in retrospect, it might have been an exercise in wishful groupthink.

So it was with a huge sense of relief that the funeral shroud of recent years was finally cast off with the 2015 assembly, which had a particular focus on the construction trades. Think about it: Four years ago, construction companies were fighting for their very lives; today, the fight is with their peer companies over where to find the best, and the most qualified, talent as they rebuild their work forces.

With nearly 30 executives conven-ed for that meeting, McCarthy Building Companies’ Mark Heit offered a tidbit that would become breaking news within hours: The NBAF McCarthy-Mortenson Joint Venture was finalizing its contract with the Department of Homeland Security—valued at $834 million—for work on the research labs at the new $1.2 billion National Bio and Agro-Defense Facility in Manhattan, quite likey the largest construction current project in the nation.

It’s one of those rare projects with enough mass to bend the gravity of an entire sector’s work force, especially one that’s starting to feel the kinds of labor shortages those executives were addressing in detail at that same assembly.

The best part is, the region won’t be solely NBAF-reliant. There is a huge amount of construction activity in the works. Less than a week earlier, city officials announced that the new $300 million convention hotel in Downtown Kansas City was a “go.” And, as JE Dunn’s Dirk Schafer says elsewhere in this issue, it’s the type of project that is more than the sum of its I-beams and bricks.

It’s hard to overstate the role that critical mass plays in economic development. But when people see things getting built, they’re more inclined to get in on the action.

Because of the coming Hyatt’s location, and the vital role it will play in connecting the Downtown loop area with the Crossroads and Crown Center, the project has the potential to further burnish Kansas City’s growing reputation as a city that has a vision, and is acting to realize it. Big enough, Schafer said, to spark additional construction and redevelopment in the greater Downtown area.

Again, though, tip of the iceberg: Other construction professionals tell us their pipelines for work are filled through 2017. And while there may be a tightening of public-sector spending at the higher-ed level, there’s still hundreds of millions’ of dollars worth of projects in the works right now.

It’s hard to overstate the role that critical mass plays in this whole process, a kind of construction spin on the Heisenberg principle: Once people observe something getting done, it changes the outcome, and they’re more likely to jump in, too. More than one industry executive noted at the assembly that reliance on public-sector work was being supplanted by institutional private-side investors who have been sitting on piles of cash for too long.

All of this is terrific news for the  region. Construction is a key driver of other economic activity, and we need it. The Labor Department tells us that the metro area’s latest unemployment rate sat at 5.4 percent—a long way from the 9-10 percent range in 2011, but still higher than it should be. Especially with broader measures suggesting it’s 11 percent in Missouri and nearly 9 percent in Kansas.

So join us in celebrating this vital sector’s recovery. It truly is good news that is very long overdue.

About the author


Joe Sweeney

Editor-In-Chief & Publisher