The year started with as many opportunities as volatility in the commercial real estate market. Now the construction industry moves into the second half of the game and volatility is staring at us ready to play.
As contractors ponder how to thrive in DFW’s hot construction market, the classic “attack wins games, defense wins championships” strategy becomes an attractive throwback idea. It might also offer a glimpse into the future.
Though the polar opposite of league games, the most fun yet incredibly boring game I’ve ever seen was Auburn’s 2008 3-2 win over Mississippi State. In Football. Both teams were terrible on offense with no ability to move the ball and a series of penalties and fumbles. It was the defense that won the game (War Eagle).
Any good businessman knows that you have to play both sides of the ball. Vision setting, emotional intelligence training, and strategy sessions are for naught if not properly balanced with process, fundamentals, and operational skill. It seems that we are at the point in our economic cycle where these processes will get their prime time slot on the field.
This year’s playbook includes several variables to consider as local construction companies evaluate how to play better defense during these volatile times:
Attract and retain talented employees: There are not enough skilled construction workers entering the labor market to keep up with current demand. Construction spending continues to outstrip construction employment, at least for the time being. Even if a recession looms or the market softens, most contractors will continue to catch up to find quality talent. While advances in prefabrication and building innovation continue to be part of the conversation, our industry as a whole can change as slowly as a Pac-12 team finding a good defense.
Industry variety: DFW offers something most cities don’t have: a tremendous variety of construction industries. Inflation seems to be testing the ceilings of office and commercial projects. Relocations and a hot real estate market point to continued growth in the multifamily housing market sector. Healthcare, life sciences, education and data centers appear to be holding up and are likely to absorb some impact from market volatility.
Meeting schedules by maneuvering through supply chain constraints: Supply chain issues are the gift that keeps on giving in today’s hardware market. Whether it’s a cement shortage or a year’s lead time for a generator, all project materials must be identified and tagged prior to commencement so that the project can be completed on time.
Understand costs and escalation: The hardware store has always been a laggard when it comes to costs. Current indices indicate that construction costs continue to rise sharply. The scouting report reveals numerous challenges, such as: B. Gas prices and raw materials. Being able to accurately estimate and meet budgets in today’s market is a double threat scenario that contractors try to plan for.
A contractor’s emphasis on fundamentally blocking and attacking their industry might not be the most conspicuous new formation, but it is a way of ensuring as much stability as possible during volatile market conditions. It will also position companies to be better placed to go on the offensive once market conditions have calmed down. There’s a football coach somewhere in Alabama who likes to talk about The Process. While not overly nice, funny, or tall, the man found his way and it has proven to be successful. Find your process, trust it, and let market volatility do its best against the five-star recruits in your defense.
Jason Weeks, regional vice president of Brasfield & Gorrie, heads the general contractor‘s office in Dallas and is chairman of the board of TEXOThe Building Association.