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.

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.

Q4 2018 Economic Indicators

We know a recession is coming, but we do not know when. In the 2019 FMI Overview, FMI reminds us that now is the time to prepare for the next downturn while the market is still good. To prepare, FMI put together a list of the top lessons learned from the last recession.

  1. Do not wait too long to make any hard decision you have been deferring.
  2. Find your sweet spot and do not just follow the herd.
  3. Work on the new, envisioned future and set the strategy for post-recession success.
  4. Get a grasp on “incremental economics” like revenue, margin, and overhead.
  5. Maintain a healthy balance sheet in the context of growth plans.
  6. Get positioned in your market early.
  7. Get more feet on the street.

We are looking ahead and cautious, and we will be ready when the recession hits. Will you be ready?

Q3 2018 Economic Indicators

Executive Summary

The labor shortage over the past years has caused wages to escalate. According to a report by Zillo Research, at the start of 2017, wages for construction-industry workers were growing slightly slower than wages for other workers – around 2.5% per year. But they are now growing 3.8% per year. This is happening for both skilled laborers and salaried positions. Anirban Basu, ABC’s Chief Economist, states in a Nov. 1 construction employment news release, “one potential cause for concern is growing evidence that wages have begun to rise much more rapidly of late. That, along with other sources of inflation, can be expected to push interest rates higher, which in turn would ultimately translate into more expensive financing for construction projects and fewer construction starts. But for now, it is all systems go for the U.S. nonresidential construction industry.” We’ll be keeping a close eye on how this might impact the industry.

2018 Q2 Economic Indicators

12 Month Performance Summary

The construction industry has seen a 4.4% increase in net new jobs (308,000) since the first of the year. Industry unemployment decreased to 3.4% in July, which is the lowest in recorded history. Construction starts are up 2% Jan.-July 2018 from the same period last year. While these numbers look good, there is still a lack of skilled workers, and the pinch is being felt on construction schedules. Even after careful planning and paying attention to the labor market and concurrent local projects, schedules are being delayed. The consequences of which are felt throughout the project’s duration. Organizations are working to make a difference. Workforce development is a high priority of the Associated Builders and Contractors, Inc. (ABC) and they are pushing to expand apprenticeship opportunities in congressional testimony. Miles-McClellan is an active member of the ABC both in Central Ohio and Charlotte. Trade partners that invest in their people and workforce development programs, generally are also members of ABC. We participate because we want to have relationships with those companies. The apprenticeships that are happening now aren’t necessarily putting more people on jobs right now, but it speaks to the commitment from within the industry to improve the labor market.

2017 4th Quarter Economic Indicators

According to the latest Associated Builders and Contractors (ABC) Construction Confidence Index (CCI), the majority of commercial and industrial contractors are confident about sales growth, profits, and staffing levels heading into 2018.

“Despite the completion of approximately eight and a half years of economic recovery, both inflation and interest rates remain low,” said Basu. “The combination of elevated wealth and confidence with low borrowing costs drives spending and investment, which supports higher demand for construction services.”

We like that positive news!

Adapted from: Basu, A. (2017, December 7). Buoyed by Healthy Economy, ABC Index Finds Contractors Upbeat. Retrieved from

2017 3rd Quarter Economic Indicators

The Associated Builders & Contractors reported a slight decline in nonresidential construction employment. Determining why this happened is proving difficult because of the following possible reasons: stalled construction projects, impact from the recent storms, or lack of skilled laborers to take over for the skilled laborers that retired. In our case, the lack of qualified labor to replace/fill positions hurts us the most. We’re curious, have the other two reasons affected your productivity?