Second Quarter Economic Indicator – A look back

2023 Q1 economic indicators

As we quickly pass Q2 and move into Q3, we are starting to understand better how the year will shape up. I recently had a chance to review The Conference Board’s (TCB) website for a description of what they see ahead. TCB’s mission is to be a “member-driven think tank that delivers Trusted Insights for What’s Ahead to help our members improve performance and better serve society.”  In a bullet point summary, TCB’s most recent update included:

  • Real GDP rose by 2.4% in Q2 ahead of the expected 1.8% forecasted. This resulted from a weakening demand in consumer consumption being more than offset by business investment.
  • Consumer consumption growth of both goods and services cooled in Q2. This trend is expected to continue for the remainder of 2023 due to three factors:
    • real disposable income is down;
    • pandemic excess savings are gone, and consumers are carrying historic debt levels;
    • mandatory student loan repayments are set to resume.
  • Business investment did more than offset the decrease in consumer spending in Q2, showing sizable spends in transportation equipment, facility structures and intellectual property products. However, this information came with a warning: TCB expects weakening consumer demand throughout the remainder of 2023, combined with high interest rates to reverse business spending trends.

A couple of examples from Q2 Miles-McClellan bidding and budgeting efforts:

Craig Richards, Vice President, “Our division originally bid a sizeable renovation project to a large, international CM firm. During Q3, 2021, the wall protection package was worth $6.7M and was removed from the scope of work due to being over budget. The package was rebid during Q2 of 2023 at $7.6M. This was a 13% increase in 18 months.”

Matt Recchiuti, Vice President, “Our team recently rebid a steel package. Our original steel package was quoted at $53,500 in February 2023, and after the project rebid in August 2023, the final (unchanged) steel package was purchased for $58,000. This is almost a 17% annualized increase in steel pricing.” 

Kevin Joseph, Project Executive, “One notable and frustrating reality that my team faces is the fact that more than half of the projects we bid this past quarter were so far over budget that the project could not proceed. It seems that across various industries and types of projects, owner’s budgets have not caught up with the price increases that exist in Central Ohio. Some owners mention that they plan to wait to rebid work once prices decrease, but we have not seen any indication that this is a realistic plan.”

While at times it may feel like we are spinning our wheels with all the budgets and rebidding, we would rather provide realistic, inclusive budgets and bids then submit low numbers with the hope of winning and not failing.

Using Our Construction Experience to Build Excellence


Building excellence and exceeding client expectations has been our core philosophy for over 45 years, and it is our exceptional team that allows us to accomplish this mission. Throughout the years, our team members have worked on a magnitude of different complex projects for clients of all sizes in all industries. This provides our clients with many advantages. Whatever your construction project or needs, we have the skills and expertise to ensure your satisfaction!

Let’s explore how we can make our construction experience work for you.

Diverse Expertise

From residential, commercial, healthcare, higher education, manufacturing, and hotels, we have done it all!  Having this knowledge and experience allows us to handle different project complexities and requirements effectively. Wherever there is a construction challenge, we have a smarter construction solution.

We Know the Industry

Our range of experience means we know the intricacies of a variety of industries and their environments. Every industry has unique needs that must be met, best practices that must be observed and certain technology that is required to help operations run more smoothly. We have had years of experience working within these different guidelines depending on our client, which is why we are confident we are more than prepared to handle even the most complex details of your construction project.

We Build Lifelong Relationship

Being a top construction company since 1978, and having numerous team members with a vast array of broad construction experience, means we have built strong relationships with our clients, suppliers, subcontractors, architects, engineers and other industry partners. This also allows us to provide a variety of different services that other construction companies can’t offer. Whatever your dreams are for your next construction project, we know an expert that can turn that vision into a reality!

Efficient Project Management

Having broad construction experience means our project management systems and processes have been refined to be as efficient as possible. Every Miles-McClellan project is guided by some of the most respected and experienced construction professionals in the industry along with an IMMPact team that shares insights and knowledge with each other to achieve building excellence.

Client Satisfaction is Top Priority

Experienced construction firms recognize the significance of pleasing the client. This is why at Miles-McClellan Construction, we stress communication, transparency and collaboration throughout the life of a construction project. We want to know all of our clients’ needs, get their feedback and help them with tough decisions. This results in building lifelong relationships.

How can our broad construction experience make your next project a success? Contact us and let’s work together to find out!

Miles-McClellan Construction vice president Brad Bloomberg LEED AP Helps Improve Safety at Columbus City Schools With HVAC Renovation

HVAC Renovation

When many think of construction projects, they immediately envision work that involves creating or updating the aesthetic aspects of a facility. At Miles-McClellan Construction, however, some of our most rewarding construction projects involve renovating critical components of a space that cannot necessarily be appreciated at first glance. When performing a design build of HVAC systems, it is crucial the various HVAC components and coordination of materials are timed correctly to ensure a successful installation. For our work with Columbus City Schools, under the direction of Miles-McClellan Construction vice president and project lead Brad Bloomberg LEED AP, improving HVAC systems has been an important part of building success and creating a safer space for students and the community.

In 2021, Miles-McClellan Construction was hired by Columbus City Schools to replace the HVAC systems and make electrical upgrades at Brookhaven High School and Dominion Middle School in an effort to improve the learning environment at both buildings. In addition to HVAC system upgrades, Miles-McClellan Construction was also given the task of making interior repairs, envelope repairs and site improvements in accordance with the design criteria. With the leadership of Brad and a strong IMMPact team, this project was completed on time and under the allocated budget.

“I enjoy how the construction industry always brings new challenges and creates new opportunities with each project to bid and builds.”

– Brad Bloomberg LEED AP, Miles-McClellan Construction vice president

In 2022, Columbus City Schools hired Miles-McClellan Construction to make HVAC and electrical upgrades at Valleyview Elementary School, Westgate Elementary School and West Broad Elementary School. Matt and his team realized that these projects required the replacement of the HVAC systems, new electrical service and both structural and architectural elements to support the new systems. All team members worked strategically to make sure all of the design, build and necessary components were in place, resulting in this project being completed on-time and without issues. These projects also minimized environmental hazards and supported student health. Projects such as this are not only fulfilling but continue our mission of building excellence in the community.

Strong leaders such as Brad and a talented, dedicated team make Miles-McClellan Construction the construction company that can do it all. From reviving the look of physical structures to improving the behind-the-scenes systems that keep the citizens of our community safe and healthy, we build success from start to finish.

We are up to the challenge of ensuring every construction project is a success! Contact us today and meet Brad and more faces behind the spaces that make an impact in the community!

Exceptional Design-Build Services Start With Exceptional Leadership

Design-Build Services

At Miles-McClellan Construction, we know that great leaders achieve great results. This is why our design-build construction projects are guided by experienced project leaders and strategically mapped out by an integrated, cohesive IMMPact team that holds each other accountable to building excellence.

With design-build construction projects, a design-build firm such as Miles-McClellan Construction works with our architect partner as they are designing the project. This approach offers several benefits, including enhanced coordination of materials, improved communication, efficient scheduling, increased project speed and better oversight and control. Let’s explore the process involved with design-build projects, and why it’s quickly becoming the top project delivery method.

Scheduling

At Miles-McClellan Construction, we always strive to complete projects on time. We make sure we understand project goals early, and always communicate risks to the whole team from the very beginning, which increases the opportunity for savings and efficient planning. Using the design-build integrated approach allows the construction schedule to be developed concurrently with the design process and identify potential bottlenecks. During design and pre-construction we also analyze the marketplace for current labor force availability, material order backlogs and current/future bidding schedules of major projects in the area. This gives us the opportunity to time our bid around the surpluses to ensure the most competitive pricing.

Coordination of Materials

For our design-build projects, our IMMPACT teams start collaborating from the early stages. This collaboration enables us to identify and select the best materials for your project, and stay on budget and within schedule. Material purchasing requires taking several different factors into consideration, such as availability, cost-effectiveness, sustainability and staying compliant with building codes and regulations. Working in sync throughout this process allows us to streamline material procurement, reduce delays and have materials delivered on time to your construction site. We also

Communication

Communicate, communicate, communicate! Effective communication is crucial in design-build projects, which is why our IMMPact team approach is incredibly effective. It promotes knowledge sharing and enables our team members to trust one another and collectively hold each other accountable to build excellence and ensure client satisfaction. This efficient communication helps address potential issues, minimize delays, resolve conflicts and keeps everyone informed throughout the project.

Completion, Oversight and Control

Our integrated design-build approach means that we are responsible for overseeing and controlling the entire project from start to finish. This provides a higher level of accountability, and also gives us the authority to make decisions promptly, resolve issues promptly and ensure that the project is completed on time and within budget. Construction is a puzzle with many solutions, some of which are more cost effective than others.

Led by talented, experienced leaders and our IMMPact teams, design-build construction projects offer enhanced coordination of materials, streamlined communication, optimized scheduling and the assurance that our clients receive a high level of excellence and customer satisfaction from pre-construction to the ribbon-cutting ceremony.

Are you ready to make an IMMPact with your next design-build project? Then contact Miles-McClellan Construction and discover how we can help you build excellence!

First Quarter Economic Indicator – A look forward

First Quarter Economic Indicator Now wrapping up Q1 and moving into Q2, at Miles-McClellan Construction, we continue to see a confusing assortment of trends. Below is a quick summary of what we have been seeing over the last 30 days and what we expect more of in Q2:

  • The broad trend speaks to the continued rising interest rates but now with an added twist of uncertainty around the banking industry’s stability. As a result of recent bank collapses and the discussions around bank capitalization and the quality of the assets on the balance sheets, lending has started to tighten. At Miles-McClellan Construction, we are experiencing many projects that are either delayed or canceled due to financing issues.
  • The private construction market continues to slow down because of rising construction costs and interest rates. As a result, we continue to bid on the plethora of public projects available this spring. Two notable trends in this bidding arena are: 1) we are starting to see a longer list of GC bidders on each project, and 2) we are also starting to see more subcontract numbers come in under each trade category of each bid. This trend will eventually lead to lower pricing, as increased competition always does.

A couple of specific examples to share are:

Craig Richards, Vice President, “In the past few years, concrete pricing held pretty steadily while other materials were escalating. However, in the last year, concrete pricing has been on the rise. For example, we paid $135.50/CY on a mid-sized project in August of 2022. We are starting a similar project this May 2023, and concrete is now $155.50/CY – a 15% increase.”

Matt Recchiuti, Vice President, “I was recently talking to a client, and she had just found out that the 1,000,000 SF warehouse project she was going to manage was being canceled. The cancellation was because the lessee agreed to lose their deposit while backing out of the lease.” 

Brad Bloomberg, Vice President, “My team used to bid 1-2 public jobs a month, and now we are averaging 5-7 per month. That is a swing of 75% private bidding to 75% public bidding over the last quarter.”

Kevin Joseph, Project Executive, “We recently contacted a shower door supplier to revisit pricing we originally received in September 2022. As a result of our inquiry, the manufacturer lowered their shipping costs by 50%, giving the owner significant project savings.”

Between now and our next publication, we will closely monitor interest rate projections and construction costs as the competition increases. We will need this up-to-date information as we work to provide our clients with competitive and realistic project budgets.

Fourth Quarter Economic Indicator – Looking Ahead

2022 Q4 economic indicators
Going into the first quarter of any year, we expect the bid market to pick up with the expectation of spring projects that have been in design throughout the winter. What we are seeing is a mixed bag of trends, and we hope sharing these trends with you will help you plan your pending projects.

Below is a quick summary of what we have been seeing over the last 60 days:

  • The broad trend speaks to the rising interest rates and rising construction costs. The private market has slowed down. Our private clients request budgets, but only some projects are heading into construction. We have currently been bidding and working on more public projects. We don’t expect this to continue because the slowdown in demand will drive construction pricing lower, which will eventually offset the rising interest rates in proformas.
  • There has been an increased sense of urgency to get formal approval for change orders on our existing projects and across all types of projects we work on. Subcontractors are hesitant to hold their pricing for over a few weeks, so we are forced to push owners and construction managers to get signed approval to lock in pricing. We support our subcontractor team in this effort, but in return and to help protect our clients, we ask for secured manpower so that our clients receive the service on time.
  • Owner’s preconstruction budgets continue to underestimate the cost of future construction. This creates rebid situations for public and private projects, resulting in project delays and frustrated owners before the project starts. We recommend multiple looks at the budgets you are creating today: one by your architect and one by your contractor. Then lock the project leaders in a room until they agree on the budget.

As a recent example, we bid on a health clinic in early August 2022. It was a competitive bid and Miles-McClellan was not the lower bidder. Our bid was 94% over the owner’s budget, coming in at $1.4M. The owner and architect rebid the project after taking the time to redesign and go through value engineering. The revised budget was raised 55% over the original budget, and our revised bid in October 2023 was submitted just above the revised budget. We were awarded the project 14 months after the initial bid.

While at times it may feel like we are spinning our wheels with all the budgets and rebidding, we would rather provide realistic, inclusive budgets and bids then submit low numbers with the hope of winning and not failing.

Self-Performing Various Trades Offers Many Project Benefits

Miles-McClellan Construction has been a part of building thriving communities since 1978. Not only do we understand how to manage construction, we know how to construct the building—and all that comes with it.

At Miles-McClellan we can handle all aspects of a project, from owner’s representation to complete project management to masonry to concrete to caulking! That’s because of the vast specialized experience our team has – including self-performing work in multiple construction trades.

There are a lot of benefits of keeping your project within the Miles-McClellan Construction team of professionals:

  • We are in control of the project schedule, so our ability to self-perform the work mitigates delays!
  • We manage the communication with our team so our clients always know the correct status of their project.
  • Our ability to control more of the trades without having to sub out work creates time and cost efficiencies!
  • Plus, we can guarantee the same Building Excellence standard that Miles-McClellan is known for!

When you work with Miles-McClellan Construction, one of our expert Vice Presidents will lead a group we call an IMMPact Team. This team works closely with clients throughout the entire project, enabling our team to work quickly, be more flexible and responsive to what our clients’ need. This is one more advantage that differentiate us from other commercial construction companies.

the Miles-McClellan Difference

Miles-McClellan Construction takes great pride in building success to grow  thriving communities. Contact us today to learn more about how our ability to self-perform various construction trades can add value to your next commercial construction project. We build success by Building Excellence!

Miles-McClellan Construction Builds Vital Retail and Dining Experiences for Charlotte, North Carolina Communities

 

No industry was affected more by the global pandemic than the restaurant and retail industries, but both industries are on the rebound. In fact, earlier this year these industries were predicted to grow between 6 and 8 percent by the end of this year. And with the remarkable population growth, the retail establishments and restaurants are thriving in Charlotte, North Carolina.

Miles-McClellan is proud to be a part of that growth with our retail and restaurant partners who are an integral part of Charlotte’s growth.

Here are some of Miles-McClellan’s commercial construction projects that help make North Carolina a great place to live, work and play.

Festive Food & Music

Loretta’s is a high-volume restaurant with private function space serving French, Creole, and southern cuisine, featuring live jazz, neo soul and gospel music.

Miles-McClellan managed the demolition of the original building to construct a 7,500-SF back-to-shell space as well as finishing the beautiful, fun space with upscale VIP areas, liquor lockers and a custom bar.

Head to Beatties Ford Road

As part of a community revitalization of an area rich in history but in need of change, Miles-McClellan was hired to help redevelop a neighborhood block to include shopping, banking, dining and more. Miles-McClellan managed the renovation of the existing retail space at 2020 Beatties Ford Road in Charlotte including renovation to the shell of the building and finishing out one of the tenant spaces for a juice bar. In addition, Miles-McClellan served as the general contractor for the renovation of an existing building for the new 1,600-SF BW Sweets and for the renovation of existing space for Mackins Bridal Boutique, both across the street from the 2020 Beatties Ford Road project.

Tacos, Anyone?

When Ohio-based Condado Tacos made its North Carolina debut in Charlotte, Miles-McClellan was there to complete a 4,600-SF interior build out for the restaurant in an existing multi-story building. The work included interior finishes, non-bearing demising walls, ceilings, lighting, food service equipment and exterior changes, including new patio railing and the addition of a new overhead door within the existing storefront opening.

Discover Charlotte’s New Man Cave and Add Some Joy to Your Home

Miles-McClellan is excited to be a part of bringing a luxury furniture design showroom and a new home décor stall retailer to Charlotte. The Miles-McClellan team managed a 7,600-SF retail interior build out for Amodernary Furniture Design at SouthPark and an 88,000-SF renovation for Southern Lion in the Carolina Place Mall, which will feature vender stalls offering furniture, home décor, accessories, art and clothing, a café, meeting spaces and a “man cave” complete with TVs and lounge chairs.

Retail and restaurants have always played vital roles in the business, social, economic and artistic soul of a thriving society. Miles-McClellan takes great pride in building success by building thriving communities. Contact us today to bring great dining and shopping experiences to your community. We build success by Building Excellence!