2023 Q4 Economic Indicator

2023 Q4 Economic Indicator The follow excerpt it taken from the FMI 2024 North American Engineering and Construction Industry Overview, First Quarter Edition.

“Best case assumptions for our forecast is for a recession in 2024, likely sometime during the first half of the year. These expectations are based on a range of predictive economic indicators, but especially the inverted yield curve. The duration of the economic contraction will depend on the U.S. policy response, but as with historical cycles, the impact on the construction industry will likely be longer lasting.”

All the lead indicators presented in our Q4 2023 Economic Indicator continue to reflect a downward trend and support the statement made by FMI above. Additionally, what we are experiencing in the market only supports this story further.

  • We have watched private bidding opportunities almost completely dry-up. We attribute this to current interest rates, owners’ fear of a recession, and the sheer number of vacant office spaces available.
  • With less private bidding opportunities we have had to jump into the public bid market which makes up just over 90% of our total bid opportunities. For the first two months of 2024, in both Columbus and Charlotte, we have seen an average of 6-8 general contractors per bid list, when a year ago at this time there were only 2-3 bidders per list.
  • Our teams have also seen a wider geographic area of subcontractors bidding on projects. Previously our subcontract bidders were contained to the Columbus market. Now we are receiving bids from subcontractors we have never received bids from before, including out of state firms from West Virginia, Michigan, Indiana, and Illinois.
  • Additionally, the sheer number of bids that we are receiving per subcontractor trade has more than doubled. Previously, we would receive 2-3 bids per trade category, and now we are receiving 6-7, the only exception being mechanical, electrical and plumbing. We are still only receiving 2-3 subcontractor bids in these skilled trade categories, and we assume that is because of a shortage in skilled labor in Columbus driven by the number of large, technical projects.

Leader Spotlight: Miles-McClellan Construction project executive Kevin Joseph Reflects on the Positive Impact of Successful Renovation

Renovating Spaces and Transforming Communities – An Interview with Miles-McClellan Construction project executive Kevin Joseph

Change is good.

Many people will hear that phrase on numerous occasions throughout their lifetime. At Miles-McClellan Construction, we have seen the power of change firsthand through renovation projects that not only transform facilities and structures, but the communities that they call home. We not only change spaces, we change communities.

While change is good, it can also be challenging. Construction renovation projects require a talented team and smart construction solutions to successfully execute in a way that satisfies the client and contributes to impactful growth for the community. In this interview with Kevin Joseph, Miles-McClellan Construction project executive, learn about his unique experiences with renovation projects, particularly renovation projects in occupied facilities, and why he believes construction renovation is a powerful tool that not only creates safer, more beautiful spaces, but uplifts the spirit of a community.

Q: Why do you like working on renovations that take place in occupied facilities?

A: We appreciate working on renovations in occupied facilities because it presents unique challenges that test our problem-solving and project management skills. It’s satisfying to deliver successful projects while minimizing disruptions for the occupants. Additionally, the positive impact on these spaces, whether it’s creating a better work environment or improving a facility’s functionality, is highly rewarding.

Q: What do you and your team bring to the table when working in occupied facilities?

A: Our team brings a unique blend of expertise, adaptability and a good sense of humor to the table when it comes to renovations in occupied facilities. We thrive on challenges and are the go-to problem-solving partners. We understand the need for minimal disruption and are adept at keeping the atmosphere light and positive during the process.

Q: Can you provide an example of “how you saved the day” for a renovation and work project in an occupied facility?

A: One of our clients received a large, heavy delivery late on a Friday afternoon. They had no way to unload it or move the shipment into the building. Our on-site team was able to pull together labor from our other nearby sites to take care of the issue. This not only alleviated our client’s immediate concern but also showcased our ability to think on our feet and provide timely solutions, even in unexpected circumstances.

Q: Do you have specific advice for renovation clients?

A: Clearly define your goals, set a realistic budget and provide open communication. The reality of renovation projects is that unforeseen issues will happen. Working together, we can navigate the process more effectively and ensure a positive outcome for the job.

Is it time for impactful renovation in your community? Under the guidance of leaders such as Kevin Joseph and his dedicated team, construction renovation is not only good, but life changing. Contact us today and let’s make sure your next renovation project is a success.

We Change the Spaces That Change Lives

Wells Barn at the Franklin Park Conservatory

“We thrive on challenges and are your go-to problem-solving partners.”

Kevin Joseph, Miles-McClellan Construction Project Executive

As defined by Merriam-Webster, renovation is the act of restoring life, vigor or activity.

As the smarter construction company on a mission to build excellence, we are proud of our renovation projects that restore and bring fresh energy into the communities where we live, work and play. Steered by our skilled leaders and a talented IMMPact team, we have witnessed firsthand how exceptional renovation construction can transform communities and change lives.

Beautifying the Community Through Renovation

One of Miles-McClellan Construction’s most noteworthy renovation projects was our work on Wells Barn at the Franklin Park Conservatory in Columbus, Ohio. Wells Barn is an existing heavy timber barn frame from the late 1800s that was renovated into a new education, community outreach and events facility on Franklin Park Conservatory’s campus. One of the most complex construction considerations faced during this renovation project was finding a way to incorporate the original timber from the barn into the modernized version that met current building codes and was structurally sound. Ultimately, our structural engineer was able to design new studs that could be fastened to the existing timber, and C-channel beams provided an additional layer of support. The updated Wells Barn has been a great addition to Franklin Park Conservatory, and now holds a variety of events that benefit the community, such as cooking demonstrations, do-it-yourself cooking classes and tastings within the kitchen space, children and youth classes, adult classes, summer camps, lectures and conferences/symposia.

Family-Friendly Renovation

It doesn’t get much more memorable than having stingrays as a client! Well, not exactly, but we loved partnering with the Columbus Zoo for numerous renovation projects that included the Freshwater Mussel Conservation & Research Center, Nocturnal Building and Aviary upgrades to create a habitat/exhibit space for the Weedy Seadragon and renovation of an existing stingray touch experience. Due to weather issues, Miles-McClellan Construction had to find resourceful ways to complete the project, including repurposing soil used in other areas of the zoo undergoing renovation and using it to cover up miles of pipework.

Renovation That Improves Safety at Schools

Some of our most important renovations have nothing to do with aesthetics, but improving critical components of a space. For our work with Columbus City Schools, we led several HVAC renovations that would make schools safer for students and staff. Under the supervision of Brad Bloomberg, Vice President, HVAC renovations at Valleyview Elementary School, Westgate Elementary School and West Broad Elementary School included replacement of the HVAC systems, new electrical service and both structural and architectural elements to support the new systems. Working strategically, these projects were completed on-time and without issues.

Changing Spaces, Changing Communities, Changing Lives

Our renovation projects transform and improve the lives of residents.  With every renovation project, we are doing our part to help our clients breathe new life into spaces that are vital to the community.

We believe in renovation that makes an impact. Contact us and let’s make a difference through excellent renovation!

2023 Q3 Economic Indicator

2023 Q3 Economic Indicator
The forecast briefing headline included in this month’s Construction Executive magazine was short and simple, “The National Economy is Weakening.”

While speaking on the magazine’s 2023 Q3 “Economic Update and Forecast” webinar, Anirban Basu, The Associated Builders and Contractors’ Chief Economist, said, “the economy has been much stronger than I would have anticipated.” But while job growth, low unemployment and increased spending on construction are positive signs, Basu remains wary of the longer-term outlook, pointing to red flags such as skyrocketing credit-card debt and other industry economic indicators. “My view,” Basu told his online audience, “is the national economy is weakening, increasingly under pressure from higher interest rates, strikes, worker shortages and loss of production; borrowing costs are higher; and excess inflation persists.”

Our attached report, is one quick and easy way to see the trends behind the headline.  The AIA Billing Index is on a four month negative trend, including the last two months below 50. The ABC and FMI backlog indicators are both on negative trends and neither has returned to pre-pandemic levels.

Quick summary: Contractor backlogs are lower right now and there will be less opportunities to pursue throughout 2024. For owners, this could ultimately result in increased competition and more competitive pricing.

A couple of examples from Q3 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.”
  • Kevin Joseph, Project Executive, “My team is continuing to feel the effects of bad owner budgets. We recently were low bidder on a City of Columbus job that is 45% over budget. The job is unawardable and the City is now trying to figure out what they can do to value engineer the job. I’m not confident that value engineering will be able to make up such a large disconnect between the budget and the reality of local construction costs. We were also recently low bidder on a public job in Mifflin Township that is unawardable due to a blown budget.”
  • Matt Recchiuti, Vice President, “Much like Kevin, really the only trend I am seeing is that Architects are woefully underestimating public budgets to owners, and almost all of the Public Work bids are having to re-bid to due a shortage of requested funds. We are still seeing delays in HVAC equipment and Electrical gear, most of the time up to a year.”

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!

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!