Despite Struggles, Opportunities Exist In Connecticut Construction IndustryNovember 30, 2016
Luke S. Ebersold, CPA
Connecticut’s construction industry has recovered somewhat in recent years from the Great Recession of 2008-09, though the pace of that recovery remains slower than the national average. As a result, according to a recent report from a leading national construction trade association, Connecticut has the eighth-highest rate of construction unemployment of the 50 states, with its rate of 6.9% far exceeding the national average of 5.2%.
Why hasn’t Connecticut’s construction industry recovered as well as so many other states in the nation? Much of it gets attributed towhat has become a very familiar refrain for our state—the high cost of doing business in Connecticut. Taxes, fees, energy costs and state regulations all play a part in this, and the bottom line simply is it costs more to build in Connecticut than it does elsewhere.
But this does not have to just be bad news for the construction industry. Despite the sluggish recovery and relatively higher cost of operating here, opportunities do exist. Particularly when we consider we live in the state with the highest median income and one of the best skilled workforces in the nation.
Where do these opportunities exist? They start at the local level, with cities and towns investing in economic development and working to bring more businesses into the community. State funds and grants exist for development projects which create new, well-paying jobs, and those municipalities willing to make those investments can provide a boost to the state’s construction industry.
Next is taking advantage of the state’s renewed focus on transportation improvements, which not only lead to more direct construction jobs in the short-term, but can also spur new development along improved routes and lead to more jobs in the long-term. In addition to the completed CT Fastrak bus route, there are a number of major highway projects either underway or in the planning stages right now, and all of them will require well-trained construction workers to complete them. As the state continues to invest in improving its roads and highways, more work will be there for the industry.
Given the level of competition that exists in the construction industry, companies should look inward to ensure they are giving themselves the best chance at success. This means making the right technological and equipment upgrades—a recent study our firm did with the Connecticut Business and Industry Association (CBIA) showed that this is the area where most businesses are currently making the most investments. Operating a modern, state of the art construction business means operating with more efficiency and innovation than ever before, and those companies that make these investments will have the best opportunities to succeed.
Finally there is education, another key investment construction companies can and should make with their time and their resources. The state has made an increased effort in recent years to attract more students to technical high schools and trade schools, and this is where much of the future construction workforce can be found. But businesses can further enhance these efforts by partnering with educational institutions to create job training programs, apprenticeships and internships to provide real world experience to those preparing for their careers. The race to get the best workers is always a competitive one, and engaging at the educational level could provide construction businesses with a competitive advantage.
While the construction industry in Connecticut continues to have its challenges, businesses should keep their eyes open to the opportunities for growth and modernization as they arise. When individual companies show improvements, the industry as a whole can soon follow. That is reason for everyone to remain hopeful.
How BlumShapiro Can Help
Like your business, BlumShapiro is a hands-on firm with a group dedicated solely to the construction industry. From our work in damage claims negotiations, we have gained insight into the real costs of projects and their impact on a contractor’s bottom line. Numerous clients rely on our professionals for advice on allocating costs in the bidding process to maximize profitable work. Together we’ll work to see that a sound financial plan is developed and implemented to help your business grow and succeed. Learn more about our construction services >>