Commercial Building Volume Down in 2015, Projects Loom

HOWLAND TOWNSHIP, Ohio – Construction dollar volume graphs distributed Wednesday night to members of the Builders Association of Eastern Ohio and Western Pennsylvania at its 46th annual meeting could have set a downbeat tone. Instead, YSU President Jim Tressel took the numbers as his cue to “go off script” as he projected the potential for $110 million in construction projects “in and around campus in the next three to five years.”

Tressel, present for the awarding of four $2,000 scholarships to YSU civil engineering students, told contractors what he foresees is in the “dreaming” and planning stages. “We’re going to add to your graphs,” he said. “We’re all on the same team.”

His rallying remarks followed the year-end report by The Builders’ executive vice president, Kevin Reilly, which showed commercial building dollar volume fell to $60,026,000 in fiscal 2015 – the lowest level in 13 years.

When nonbuilding construction numbers are included — $283.6 million in road and bridge projects, total dollar volume rises to $343.6 million, an increase from $320.3 million in 2014.

Still, Reilly noted, total man-hours fell to 3.078 million, down 2.1% from 2014, confirmation that the union tradesmen the contractors employ worked on fewer jobs. Since the trade group was founded in 1971, the historical average has been 3.75 million man-hours.

“It’s concerning,” Reilly said. “Hopefully we’ll be able to improve in 2016.”

The Builders Association tracks dollar volume and man hours on a fiscal-year basis, Oct. 1, 2014,  through Sept. 30. While the man-hours reflect the actual time union workers were paid by the trade group’s members, the construction numbers are compiled based on projects announced during the fiscal year as reported by Dodge Data and Analytics.

In an interview following his presentation, Reilly cited “multiple factors” for the 2015 decline in building construction. There are fewer school construction projects, health-care work announced in 2015 is in progress and much of the “small-dollar volume” commercial work is performed by contractors based outside the region.

“A prime example is the Menard’s store built in Trumbull County,” he elaborated. “There wasn’t one local contractor on that project and there might have been one or two contractors who were even from the state of Ohio.”

National chains typically hire “contractors who travel all over the country to build their projects. They bring workers in from out of town and expect our local people to shop at their stores but they don’t employ any of our local contractors in the building project,” Reilly said.

Commercial construction is also adversely affected by the downturn in the oil and gas industry. But that sector also presents the most potential for 2016 and beyond.

Contractors are already working at the proposed site in Beaver County, Pa., for Royal Dutch shell’s $4 billion cracker plant. “It’s not officially announced yet but there’s a lot of work going on there,” Reilly said.

Another cracker plant could be built in nearby Belmont County, and there are electric power plant projects proposed for Lordstown and Wellsville in Columbiana County.

“If some of these come to fruition, that’s going to fantastic for our area and our members,” Reilly said.

The Builders Association represents 150 construction companies that employ union skilled tradesmen. As such, the association staff, with assistance from contractors who also sit at the bargaining table, negotiates wage and benefit agreements with the building trades. Four contracts of varying terms were signed in 2015, reported Dan Fry, labor relations director. Average wage increases ranged from 2.03% to 2.89%, he said.

In 2016, another four contracts will be negotiated including one that covers members of Teamsters Local 377. “I don’t anticipate any of these four agreements to be too difficult,” Fry said.

“I can’t emphasize enough the importance of contractors participating in these negotiations,” he told the contractors. “Your involvement is crucial and can make a difference.”

Fry also reported on The Builders apprenticeship programs conducted jointly with the skilled trades. “The skills gap is here and it’s here now,” he began. Through outreach efforts with the region’s schools, students and parents, it is beginning to shrink a bit, he said. The number of new apprentices increased to 292 this year, up 15%. Female and minority participation in the programs also increased.

The annual meeting, held in The Grand Ballroom of the Avalon Inn, concluded with the election of new officers. Jim Santini, president of Jim Santini Building Inc. of Washingtonville, is the new president, succeeding Howard Agueda of VEC Inc.

Jeff Mason, vice president of Youngstown Tile & Terrazzo Co., Jeff Donatelli, associate director of operations at Donatelli Electric in Sharpsville, Pa., and Sam Boak, president of Boak & Sons Inc. of Austintown were elected vice presidents.

Pictured: Howard Agueda, Jim Santini and Kevin Reilly.

Copyright 2022 The Business Journal, Youngstown, Ohio.