The Current State of Construction Pricing

There is no question that the last few months have been difficult for the commercial construction industry. However, our own Todd Ruff, VP of Preconstruction, has kept a watchful eye on the market across Colorado & Wyoming. We sat down with Todd to discuss what he has observed with subcontractor pricing in the local commercial construction market.

While the impact has varied from trade to trade, Ruff noted that “what’s most telling is what I call the market pressure. Subcontractor backlogs seem to be burning off. With project delays and increased competition throughout the bidding process, we are seeing an overall decrease in labor prices throughout the Front Range.”

“It’s just that market feel of, ‘I need a project and I’m willing to get a little more aggressive than I would have three months ago,’” he furthered. “All of those market factors that are coming into play are where we are seeing the most volatility right now. We competitively bid out 15-20 projects a month, so we’re seeing some real-time changes in the market.”

The IHS Markit PEG Engineering and Construction Cost Index is used as an indicator for wage and material price inflation in the North American marketplace. It is comprised of Materials/Equipment and Subcontractor Labor sub-indices. These are then used to calculate a total Headline Cost Index. It operates on a 100-point scale and uses 50 as a baseline, which indicates no change in pricing.

In July, the Subcontractor Labor Price Sub-Index registered a 40.2 after a slight uptick in June. This indicates that all regions of North America witnessed a decrease in labor costs. However, it is important to note that the index’s six-month outlook was calculated to be 62.0, indicating that labor prices will rebound in the coming months.

For the Materials/Equipment Sub-Index, July registered at 44.8, continuing the trend of falling labor prices (see exhibit 1). But while materials and equipment may be cheaper, they are in shorter supply due to the choke that COVID-19 has put on supply chains.

Construction Economics Graph

Ruff stated that “Without question, lead times on manufactured equipment and components are being dramatically impacted. When you would usually hear, ‘Six weeks,’ you’re now getting ‘I don’t know, let me look into it.’ We’re keeping really close tabs on our equipment supply chain. Every trade and all materials are affected and you’ve got to be on top of it every day.”

Our deep involvement and knowledge of the commercial construction industry equips us to successfully manage client relationships while continuously monitoring the state of the market. Through all of this uncertainty, we have prioritized our commitment to our clients and trade partners, and have continued to provide a top-rate service. If you are looking to move a project forward in the coming months, we would be happy to discuss the ways we can utilize our expertise to ensure an exceptional building experience.

Construction company teaches professor what to teach students

Construction company teaches professor what to teach students

Construction company teaches professor what to teach students


GH Phipps wants to address the shortage of skilled workers in construction.

 

Read Original Article Here.

 

GREENWOOD VILLAGE, Colo. — Matt Barrows is used to being in the front of the classroom as an assistant professor at the University of Nebraska. But, he’s spending his summer in Denver being a student.

 

“My main goal is to bring industry into the classroom,” Barrows said. He is working as a Professor in Residence at GH Phipps Construction in Greenwood Village. This program started three years ago to address an industry-wide problem.

 

“There is an aging workforce in our industry that needs to be filled,” Kate Lavicky, GH Phipps human resource partner, said. Lavicky said with all the construction going on around Denver, there is a demand for skilled workers to come out of college ready to go.

 

“The goal is (to) take a professor who’s very engaged at a university level in teaching various types of construction curriculum and bring them back into the workforce (to) get experience with industry in hopes they’ll take what they learn back to the classroom,” Lavicky said.

 

Barrows said it’s been a great experience learning at job sites, working with planners, and being exposed to the latest technology developments. He said he is staying current with the industry.

“It’s benefiting me more than them probably,” Barrows said.

 

Lavicky calls it a win-win.

 

“It’s a key function to make sure that the students that they are engaging with are caught up to speed and that they have the skills and the background needed that we as an industry require when they graduate,” Lavicky said.

 

Barrows believes his summer learning experience with have a ripple effect in his classes at the University of Nebraska.

 

“Construction management is a very hands-on industry and learning out of a textbook is not the way to get that done,” Barrows said. “I have a product that they want and so they have a vested interest in making that product more successful.”

 
 
GH Phipps Awarded Contractor of the Year

GH Phipps Awarded Contractor of the Year

GH Phipps Awarded Contractor of the Year

Read Original Article Here.

DENVER — GH Phipps has been awarded 2018 Contractor of the Year for the Colorado, Wyoming and Dakotas segment of ENR Mountain States.

A shortlist of three firms from the region were selected by ENR staff based on revenue growth, ranking, new initiatives, safety, reputation and strong community. Editors from across the country selected GH Phipps from a one-page outline of recent and current work, recent awards and the company’s Retention Initiative.

“It was always about the relationship that you had with the client and being that trusted partner. We don’t look at clients as transactional in nature … we really look for clients that have those work programs where we can establish a relationship with them and continue to be engaged with them for years,” President Kurt Klanderud told ENR Mountain States when speaking of his history with the company.

In 2015, GH Phipps won the Colorado Project of the Year from ENR Mountain States for the distinctive Science Pyramid at Denver Botanic Gardens (DBG). This year, GH Phipps is back to work at DBG, constructing the 100,000-square-foot Freyer-Newman Center for Science, Art and Education – the final piece of DBG’s 11-year-old master development plan.

“The Phipps team has just been outstanding,” says Brian Vogt, CEO at the gardens. “They care deeply about the mission of the gardens and they understand our institution.”

Phipps is also building elementary and high schools in Colorado and Wyoming; a $70-million expansion of the Children’s Hospital Colorado North Campus in Broomfield; and Lakehouse on 17th, a 12-story, $107-million condominium-and-townhouse development in Denver.

The company is also the 2018 recipient of the Associated General Contractors (AGC) in the Community Award for an annual volunteer program to contribute 1,952 hours across 60 charities.