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!

Q3 2022 Economic Indicators

Q3 2022 Economic Indicators Both our Q1 and Q2 2022 Economic Indicator reports emphasized the effect inflation is having on our industry. It continues to be my goal to share both published trends and commentary as well as local Miles-McClellan experiences.

ENR’s Economics Report on future material and labor price trends, “2022 Third Quarterly Cost Report” was just released and I’m including some information from that report here.

To kick off the report, Richard Branch, chief economist at Dodge Construction Network, is quoted as saying, “The construction sector has turned into a tale of two worlds. First, the nonresidential sector has been a solid performer as manufacturing, public works and data center construction have flourished. Conversely, single-family construction continued to trend sharply lower as rising mortgage rates have led to worsening affordability. The question, though, is how the entire construction sector will react to still higher interest rates over the coming quarters as the Federal Reserve continues its inflation battle with aggressive rate hikes.”

The report goes on to focus on both materials and labor.  It details 15 different construction inputs and notes that prices vary, year-to-date, from -6.0% (copper), to +22.6% (asphalt paving). Of the 15 areas tracked, 12 were higher since January 2022 and all 12 categories were up by double digits through August 2022. The article does go on to explain why ENR anticipates soft lumber and steel to start moving downward in 2023, but acknowledges the trends really depend on how increasing interest rates affect demand.

Labor rates also continue to rise, however, now at a much faster pace. Both union and non-union wages had been averaging between 2-3% annual increases, however, the numbers jumped to 4-5% average increases in 2022. According to Ken Simonson, chief economist of the Associated General Contractors of America, “I believe we’re in a prolonged period of 5% wage increases or even more for craftworkers.”

At M-M, we will continue to work very hard for our clients to control unwanted price increases and schedule delays. Our strategy has been to maintain strong relationships with constant communications with our subcontractors and suppliers so that we have the most up-to-date information to share on each of our projects.

Building Community Excellence, One Structure at a Time

Miles McClellan is involved in a number of community events and projects
At Miles-McClellan, we recently celebrated Construction Inclusion Week, an annual event that harnesses the collective power of general contractors, specialty contractors, subcontractors and suppliers to build awareness and improve diversity and inclusion in the construction industry across the nation.

The celebration which took place between October 17–21 centered around five daily themes, including commitment & accountability, belonging, supplier diversity, workplace culture and community engagement. As we participated in these daily themes, we were reminded of why we do what we do.

We are not only Building Excellence in our structures, but we are building excellent communities — inclusive communities in which our team is proud to live, work, participate and give back.

We Build Communities We Are Proud To Live In

What makes someone proud to live in their community? Though the answer is not particularly clear and is not the same for every community, three factors stand out — safety, security and access to health care. Miles-McClellan has built safter communities through projects like the Charlotte-Mecklenburg Police Department and the Mooresville Fire Station 6 in North Carolina

It is our commitment to not only make it easier to protect communities, but also to be a part of the construction of facilities that make it easier for our community heroes to do their jobs and take care of themselves by offering gyms, kitchens, rest areas and recreation.

We have improved access to great healthcare for everyone in Columbus by being a part of projects at Nationwide Children’s Hospital, OhioHealth and Whitehall Heart of Ohio Family Health Center.

Some other important factors in community pride are arts, culture and beauty. We couldn’t be prouder of the work we have done to enhance these community assets, including projects with Franklin Park Conservatory and the Pizzuti Collection Art Gallery in Columbus, Ohio, and the Chatham County Agriculture & Civic Center in Pittsboro, NC.

We Build Communities We Are Proud To Work In

Connection, collaboration, accessibility are assets of great working communities. By building structures that make it easier to commute, park and build strong partnerships, Miles-McClellan is building community pride.

Community pride requires a thriving workforce with access to education and training. Miles-McClellan has led construction projects for all levels of education, from Isaac Dickson Elementary in Asheville, North Carolina to Marietta College’s Harrison Hall in Ohio. And we build offices and facilities anyone would be proud to work in, like the Honda Aircraft Co. World Headquarters and Research Development facility in Greensboro, North Carolina, projects for Scotts Miracle-Gro in Ohio and Proctor & Gamble production facilities in both North and South Carolina. 

We Build Communities We Are Proud To Give Back To

We have witnessed how communities have been strengthened through infrastructure, but it is our goal to strengthen them even further through corporate giving, volunteerism and meaningful partnerships.

As a company we support 58 non-profit organizations, provide paid internships and donate to causes important to our employees and clients.

Over the years, we have built a variety schools, hospitals, health centers, libraries, fire and police stations, churches, museums, restaurants, hotels and more. With each project, we have left more than a building; we have left a legacy for every hand, head and heart who helped build these structures and every man, women and child who use them.

Making an IMMPact in the communities we serve is at the core of all our projects, and our commitment to our people, our clients and our communities is unwavering. Contact Miles-McClellan for more information about our projects, our team or our community support.

Miles-McClellan General Superintendent, Steve Johnson, Shares Advice for Owners as They Start a Construction Project

Building Excellence requires communication, collaboration and connection. As part of your IMMPact team, it’s my job and my commitment to you to set the right expectations and gain your trust as you approach your construction project. You can have the confidence in knowing that the success of your project is as important to us as it is to you. We take pride in the final product, and if my name is behind the building, you can be assured I will do everything possible to make sure the work is done right and on time and budget.

Your best money and time spent is during the pre-construction. Everyone has their own opinions about how to get projects done, so creating a shared vision and plan is a great starting point. This can be accomplished by walking the property early in the process, as well as after drawings are completed, to make adjustments and to get on the same page prior to project approval and permit submissions. Once construction begins, it’s very difficult to stop or change, so let me share some tips on creating the vision and expectations for your project before construction begins.

Have a Blueprint for Construction Success

Nothing slows down construction progress more than change orders and revisions. Therefore, it is important to have your drawings complete prior to starting construction. Avoid changing the plan if possible. Finalize the details of your project early on to ensure it is “buildable” and to provide more inclusive plans to sub-contractors, so they can provide their most accurate bids.

One thing to consider before starting construction is that unforeseen circumstances are bound to happen. They always do. So, trusting your construction team and making sure there is enough contingency in the budget can help to avoid uncomfortable conversations and surprises throughout the process.

Be Realistic About Your Involvement in the Construction Process

Construction is time-consuming. Be realistic in assessing how much time you can devote to the project and be sure to choose a contractor you trust so you can give the right amount of attention to your project and to your company’s operations and overall well-being.

Don’t Judge a Bid by Its Cover Price

My mother always told me, “If it seems too good to be true, it probably is.” Seemingly minor details can significantly affect the price you pay in the end. For example, a low bid may look attractive on the surface, but it may not include things like materials and installation costs. Make sure to ask questions about what is included in the pricing and where the project team costs can be found. You will need to be able to put each bid into perspective to accurately assess whether you are getting a fair price per square foot. Working with a construction company you trust can avoid costly surprises.

Ask Questions About Your Project — Lots of Questions!

Clear communication is vital in any partnership, and we know you need a clear picture of what is happening with your investment. As construction professionals, we sometimes use industry jargon or explain techniques and processes using technical terms. It’s a second language to us, and we often forget that we are speaking a language not everyone knows. So, ask questions! Ask until you understand the answer! Ask until you have no more questions! Your construction team should guide you through the process and take the time to explain everything so everyone is on the same page and there aren’t any assumptions that can turn negative.

Remember, your project’s success is also a personal success to every construction professional who works on your facility. Your team at Miles-McClellan wants to make sure your project is set up for success from the very beginning. We are on your side. That’s why Miles-McClellan strives for Building Excellence through relationships with communication, collaboration and connection that results in exceeding client expectations.

Contact Miles-McClellan to learn more about how we strive to resolve issues before they become problems.

Miles-McClellan Helps Columbus City Schools Reorganize and Repurpose to Combat Overcrowding, Safety Concerns and Aging Buildings

In 2019, more than 630 children were attending Dominion Middle School, which was built to house 409 students, and the popularity of the high-achieving school suggested a future of rapid growth. At the same time, there was an aging high school in the area that could handle the growth but needed major renovations.

That is when Columbus City Schools (CCS) hired Miles-McClellan as the design/build contractor for the building envelope project of the former North High School. The historically registered building opened its doors in 1924. The design/build team was tasked with making the building safe and dry for students and staff, while preserving the building’s beauty, character and history.

former North High School

The project replaced the roofing, windows, skylight systems and completed masonry restoration. Each component of this project came with its challenges. The existing windows were installed in plaster containing asbestos that had to be removed, the roofing and masonry work had to be coordinated and, of course, the labor shortage and strict timeline to make sure kids could start school as scheduled in the fall played a role. But this project had the additional challenge of working with the Historical Preservation Committee to ensure all design, materials and construction techniques were approved during the design/pre-construction phase.

One of the historical requirements was to mimic the original historic sightlines of the original windows. After a great deal of preparation work, multiple manufacturer bids and an extensive review of three products to make sure they fit the design and performance specification, the Historical Preservation Committee was pleased, and the approval process went smoothly.

With a highly scrutinized budget by nature of working with a public school system, Miles-McClellan delivered a dry, safer school $19,637 under budget. In a 2020 interview with The Columbus Dispatch, Dominion Middle School Principal Dorothy Flanagan said, “We couldn’t have asked for a smoother process from district leadership and our design and construction team.”

Overall, Miles-McClellan has managed 11 projects to improve the safety and learning environment for CCS, including one current project to replace the HVAC systems in Valleyview Elementary, Westgate Elementary and West Broad Elementary schools.

Other HVAC upgrades, electrical upgrades and facilities renovations include Brookhaven High School, which now houses the Columbus North International High School, and the former Dominion Middle School, which is now the New World Language Middle School.

Safer schools are a priority for Columbus City Schools and Miles-McClellan. We are proud to have helped CCS provide more secure entrances to 10 district school buildings — adding new security checkpoints in five schools and upgrading security vestibules at another five schools. The work included demolition, casework, aluminum storefronts, wood doors, hollow metal frames, door hardware, drywall, painting, HVAC and electrical.

“The team at Miles-McClellan not only produce good work, they are very personable, responsive and organized. They have a great system in place to manage projects and they have helped Columbus City Schools make our schools better and safer for our students.”
-Columbus City Schools Facilities Rep

We build success by Building Excellence! We take pride in our people, and we take pride in our work. Contact Miles-McClellan Construction to put that pride to work on your next project.

Miles-McClellan Is Building Excellence With People

Miles-McClellan Is Building Excellence With People

While technically speaking, all our construction projects start with building materials at a job site. Our projects really start with our incredible employees who come together to form experienced and reliable teams that plan, facilitate and complete dynamic projects that are customer-centric.

So how does Miles-McClellan Construction (MMC) stand above the rest?

With our hands – Our team uses our hands to build quality structures and each project has our unique MMC thumbprint on it. Our construction projects are a major part of our clients’ stories and our company’s story and legacy.

With our heads – We offer our employees opportunities for career and leadership development, which help them with planning and problem-solving in their positions.

With our heart – The positive impact our projects make for people in local communities means everything to us. Client satisfaction is of paramount importance; it guides our work and recruitment. We believe in hiring the best people who will bring their valuable experiences and skill set to every project. Combine this with a purpose-driven heart and you have the answer to why Miles-McClellan has been a leader in commercial construction for over four decades (and counting!).

We are proud of our relationships with our employees and our clients. Simply put, pride is why we do it!

Below are a few ways Miles-McClellan distinguishes itself from other commercial construction companies with how we approach our team, starting with recruitment. Building excellence starts with attracting and supporting excellent employees.

Recruit and Develop Leaders on Our Strong Foundation

One of the best ways to sustain and grow a business is from within. Successfully recruiting talented individuals to join our team is not just about filling a specific position in the present. When we recruit and interview applicants, we focus on their current skillset and experience and their future potential. By seeing the talent and potential of our employees, we provide opportunities for them to develop into leaders at Miles-McClellan, which translates to employees and senior management being on the same page. For example, we work with the Builders Exchange of Central Ohio to provide leadership classes for some of our employees called BXFlex (Field Excellence Leadership Series). Just like we envision the potential of our projects and our employees.

Provide Career Path Development

When a job feels static with little or no opportunity to grow in a company, that can negatively affect employees’ work production and morale. That’s why we pride ourselves on providing career path development. Employees who will feel their work is appreciated and that there are chances for promotions and increased responsibility positively impacts their work and the company. Investing in our people for the long-term is an investment we make in them, and we make to drive building excellence for our clients.

Personal Ownership of Projects

Miles-McClellan ensures our expectations and our clients’ expectations are always being met by taking personal ownership of projects. When people feel personally responsible for getting something done, large or small, it promotes a culture of excellence. Our IMMPact approach illustrates this point of personal ownership by emphasizing knowledge sharing, which allows our team members to trust one another and hold each other accountable throughout a project life cycle.

Client Reassurances

Investing in our people is an investment in our clients’ projects. This level of continued investment and support directly correlates to our more than four decades of building excellence in Ohio and North Carolina. There are many non-tangibles that go into constructing a facility and we make sure to account for these factors to ensure we are always doing things the right way.

We take a lot of pride in our work at Miles-McClellan; it’s why we do it! And our pride is visible in every level of our company and with our great employees throughout their career experiences and development. Miles-McClellan strives for building excellence for a better community, for you.

Miles-McClellan Helps North Carolina Town Navigate Rapid Growth Enhancing Peace of Mind and Recreational Opportunities

Mooresville, NC

The Town of Mooresville, NC has more than doubled over the last 20 years. The population has grown from 32,711 in 2010 to 50,193 in the last decade alone, according to the 2020 U.S. Census. With this rapid growth, the city had to expand its services protect and improve the lives of its citizens.

After being granted $46.5 million in limited obligation bonds from The Local Government Commission to improve public safety and services, the Town of Mooresville contracted Miles-McClellan to design and build a new $3.5 million fire station and training center. Fire Station No. 6 is 13,000 square feet and will feature two engine bays, locker rooms, sleep quarters, administrative offices, a full kitchen, conference space and an outdoor patio.

Although the project is progressing nicely today (check out the progress on our live webcam), it did not come without challenges. The fire station was scheduled to be presented to the Board in March of 2020, but the North Carolina government locked down due to COVID-19, and Mooresville halted spending on all new projects. The Fire House 6 project was delayed until February 2021. During the delay, many material shortages and price increases occurred in the construction industry, but with the collective hard work of Miles-McClellan, the design team and the Town of Mooresville, Miles-McClellan was able to deliver the same product at a similar price and construction continues to move forward.

In addition to Fire Station No. 6, Miles-McClellan has worked with the town to enhance cultural and recreational opportunities for all the citizens of Mooresville. The company was awarded the $3 million Selma Burke Center Renovation, which was a high priority project for Mooresville’s Parks and Recreation Department. The renovation consisted of some “tricky elements,” according to Chris Wyckoff, Mooresville’s facilities and construction manager, like combining existing structures into one elemental structure. Miles-McClellan also managed the site work (landscape, furnishings and signage), renovations to the existing gymnasium with new basketball courts, a new playground and picnic shelter and a new 8,000 square foot, prefabricated multi-purpose building with classrooms.

“Their ability to work with our needs and sub-contractors, as well as control a project through difficult weather was spot-on,” says Wyckoff.

Miles-McClellan also managed the town’s Art Depot renovation, a historic building dating back to the 1970s, bringing the facility up to ADA standards and allowing the Art Guild to utilize their warehouse areas, featuring open beams and heavy barn doors, in a way previously not possible.

Miles-McClellan projects don’t just enhance the lives of the two-legged residents of Mooresville, they also help some 4-legged residents with the development of The Officer Jordan H. Sheldon Memorial Dog Park in Cornelius Park. The dog park is dedicated to a fallen K-9 officer who was killed in the line of duty. Wyckoff says the work on the dog park “led to a great moment of healing and happiness for the town, the family and the police department.”

“Working with Miles-McClellan on Fire Station No. 6 has been a great team experience all the way through design and now well into construction. They have demonstrated their ability to perform on previous projects and have continued to deliver. It is great working with a contractor who you can trust also wants to be a steward of tax-payer dollars and do right for all stake-holders.”
Christopher Wyckoff
Facilities & Construction Director
The Town of Mooresville

Miles-McClellan Turns Buildings into Art for Franklin Park Conservatory

If you’ve been to Franklin Park Conservatory in Columbus, Ohio, you have seen firsthand how nature meets art through their displays of beautiful flowers, plants and organic landscapes, enhanced with real pieces of art. But did you notice how the buildings themselves fit into those landscapes and how, through lighting and innovative architectural design, they have become an art exhibit of their own?

With the Conservatory’s vision to restore the vitality, grandeur and beauty of Franklin Park while retaining its original charm and character, Miles-McClellan Construction has managed a variety of projects for The Conservatory, including the expansion of the John F. Wolfe Palm House, a registered Historical Place. As part of a four-phase, two-year expansion campaign, Miles-McClellan completed the expansion of The Palm House by building two 5,000 square foot additions that flank the building’s existing corridor, one designed for special events and the other for administrative offices. The versatility and creativity of the design added 10,000 square feet of flexible space for open air gardens, water features and elegant gatherings, while conquering the roadblocks that come with historical renovations.

In addition to the expansion of The Palm House, Miles-McClellan oversaw the construction of the Bride’s Garden, community gardens with education pavilion, and LIGHT RAMIENT II, an inspiring light display which illuminates The Palm House and was designed by internationally renowned, award-winning artist James Turrell.

Franklin Park Conservatory before and after

In 2015, as classes, programs and community outreach increased for the Conservatory, a new space was needed, so the organization relocated an historic barn’s timber frame, which was set to be dismantled, from northern Ohio to its campus. Miles-McClellan took on the transformation of the Wells Barn, which is not only a piece of history, but a construction marvel filled with engineering innovation, including a basement with classroom space, an elevator, a large event space, a commercial kitchen, and a bar.

“The project was completed on time and on budget, which is critical for a non-profit organization, in large part due to Miles-McClellan’s commitment to problem solving, open communication and outstanding project planning and budgeting.”

Garry Clarke, Vice President of Planning
Franklin Park Conservatory and Botanical Gardens

Building Excellence takes teamwork and Miles-McClellan would like to thank its architecture, engineering and landscape partners, and the Franklin Park Conservatory, for helping to create these amazing spaces.