Q3 2024 Economic Indicators

mmcrebuildstg on November 7, 2024

2024 Q3 Economic Indicators

Architecture Firm Billings and Reconstruction Trends: A significant portion of architecture firms report steady or increased work on reconstruction projects, focusing on modernization, adaptive reuse, and upgrades in building systems. However, challenges loom as billings have declined for 12 straight months, including securing agreements for larger projects, partly due to high interest rates.

ABC Construction Backlog and Confidence: The Construction Backlog Indicator showed a slight increase in September 2024, reflecting moderate confidence in future sales and profit margins despite economic headwinds. Contractors are optimistic about the easing of interest rates and material costs.

Dodge Momentum Index: The index, a leading indicator of nonresidential construction, declined by 4.2% in September due to a slowdown in data center projects, though institutional projects in education and healthcare saw growth. The index remains high, driven by institutional, education, healthcare, and recreational projects entering the planning queue.

Sector-Specific Forecasts:

  • Nonresidential Construction: Expected to slow, with key drivers including economic factors like high office vacancy rates and reduced warehouse construction.
  • Healthcare and Education: Stable investment levels are anticipated, with growth expected in late 2025. Education sector growth is projected due to bond measures and continued support for higher-education projects.
  • Residential: Multifamily residential construction is forecasted to decline due to inventory surpluses and stable rental rates, while single-family residential shows signs of recovery.
  • Manufacturing: Federal funding initiatives are expected to fuel a significant increase in construction investment in semiconductors, electric vehicles, and biomanufacturing sectors. However, talent shortages and supply chain issues pose challenges.

Outlook: The construction industry expects moderate growth through 2024, with slower expansion in sectors sensitive to interest rates. Anticipated federal rate cuts in 2025 may stimulate new projects, particularly in public safety, manufacturing, and amusement/recreation. Our report reflects a cautiously optimistic outlook, tempered by ongoing challenges related to high interest rates, supply chain constraints, and sector-specific issues like high office vacancies and the multifamily housing slowdown.

 

The Heart Behind Healthcare Construction

mmcrebuildstg on November 4, 2024

Whitehall Heart of Ohio Family Health Center

As expanding healthcare capacity becomes more and more in demand, commercial construction in healthcare facilities has increased. Our construction experts have a vast amount of experience in the health and medical field and have worked on some of the largest projects in the regions we operate within. We understand the unique complexities of healthcare construction, which include building spaces that accommodate complex medical equipment, align with strict sanitation guidelines and improve patient comfort.

Keep reading to learn about rising trends and things to consider when working on healthcare construction projects.

Focus on Patient-Centered Design

When working on construction in the healthcare space, finding ways to keep patients comfortable and safe is of the utmost importance. To provide patients with more comfort, healthcare facilities are incorporating more natural light, calming environments and flexible layouts that accommodate both patients and families. After the COVID-19 pandemic, hospitals also began building more flexible, adaptable spaces that can be easily converted during crisis situations and surges in patient numbers. It is also important to ensure that existing patients in the hospital aren’t disturbed by construction taking place at the facility. Miles-McClellan Construction always plans thoroughly before any healthcare project to ensure that patients, visitors and employees will not be negatively impacted by our construction team, even if that means performing work at non-typical hours of the day.

Technological Integration

Hospitals need to be able to accommodate the advanced medical equipment, telemedicine rooms, digital health monitoring tools and more, and many are incorporating smart technology into their systems as well. We always work with our healthcare clients to better understand the purpose and potential equipment that will be needed in a space, and come up with ways to make spaces scalable to accommodate future expansions. To date, we have created spaces and incorporated equipment for rooms that include medical and behavioral exam rooms, obstetrical and prenatal rooms, nursing stations, in-house print shop, sleep labs and MRI suites.

Sustainable Building Practices

Building sustainable spaces has become an important goal for many entities, including healthcare facilities. Sustainability in healthcare facilities is not only done for environmental reasons but also to reduce operational costs. At Miles-McClellan Construction, we are experts at constructing energy-efficient healthcare facilities that use sustainable materials and reduce waste, and work with clients to help them achieve green building certifications such as LEED (Leadership in Energy and Environmental Design). This can help hospitals and medical centers lower their carbon footprint and improve the overall environment.

Have a Healthcare Construction Project Coming Up? You’ve Reached the Right Construction Team.

Our healthcare construction experience includes:

  • Hospital construction
  • Outpatient clinic construction
  • Medical office building construction
  • Surgery center construction services
  • And more

Check Out Some of Our Healthcare Construction Projects:

Healthcare construction done right means healthier patients and communities. Contact us for more information about our healthcare projects and experience.

Miles-McClellan Construction Senior Project Manager Dillon Overman Discusses Why CMR Project Delivery Is a Good Fit for Non-Profit Construction

mmcrebuildstg on October 23, 2024

Upper Arlington Lutheran Church

At Miles-McClellan Construction, we know that the work we do makes an IMMPact in the community. As a company that has integrated giving back as part of our culture, non-profit construction projects hold a special place in our hearts.

In this interview with Senior Project Manager Dillon Overman, he discusses his background, the most rewarding aspects of non-profit construction and why he believes that construction management at risk (CMR) is the ideal project delivery solution for non-profits.

Let’s Learn About Dillon’s Experience With Nonprofit Construction!

Q: What experience do you have working with non-profit organizations, and why do you love working with them?

I have had the pleasure of working with numerous non-profits in my 10 years in the industry. Everything from churches, hospitals and community improvement facilities. I like working with these entities because they seem to have a strong “what we do matters” mentality. They are not just focused on the bottom dollar, they truly care about the work being put into place.

Q: What was your favorite non-profit project and why?

My favorite non-profit to work with has been the Upper Arlington Lutheran Church. Most bigger non-profits have a team to oversee construction, but this client relied heavily on our expertise and trusted us to do what’s right for them. That’s an awesome feeling, knowing that someone trusts our team to have their best interest in mind. 

Q: What do you bring to the table – why would a client want to work with you?

Our approach at Miles-McClellan is different from any other. We call it the “Tee to Green” method, which means that the team involved with your project takes the project from design all the way through completion. That is much different than most other companies. This approach allows for the team to be a part of the project from start to finish which we believe is crucial.

Q: Why is Construction Management at Risk a viable option for non-profit projects?

Construction management at risk is quite arguably the best option for non-profits. Here are a few reasons why:

  • It locks in a set percentage of fee long before any construction is put into place. This allows for owners to see up front the construction management fee. It allows for a great deal of transparency.
  • The CMR delivery method brings a firm on early in the process, allowing for a few stages of budgeting before construction documents are issued. It allows for the owner to get a sense of where costs will land, and where costs can be cut to meet a desired budget.
  • In a typical CMR delivery method, the construction manager normally picks the team of architects and engineers that they would like to work with on a project. When a team is well-oiled and has worked together before, it makes for a much smoother project.

Q: Can you name an example of “how you saved the day” for a client?

We were doing a multifamily project in Franklinton, Ohio, which had a phased turnover. This means that tenants were living on the 1st floor while we were still working on the upper floors. Late one night, a sanitary line was backed up with a bunch of rags that somehow made their way into the pipe. Water was backing up into the 1st floor common area which was just finished. My team got the call and quickly made our way down to the project to rectify the situation before it flooded the whole floor. At Miles-McClellan, the “do whatever it takes” mentality of our team, makes us stand out from others like us.

Q: Do you have any specific advice for those in the construction industry managing a construction management at risk project?

A good project using the CMR delivery method starts with clear scopes and open communication with the subcontractors on that job. Having that clear communication up front and laying out responsibilities for each task makes projects run much smoother.

Q: What is your project management philosophy?

It’s kind of a cheesy one, but the saying “you attract more bees with honey than you do with vinegar” holds true in almost everything. Being calm and collected as a leader will allow for solutions that both parties can benefit from. Set an example for those around you as to what a good leader does on a project.

Do you have a non-profit construction project on the horizon? Would you like to learn more about construction management at risk project delivery? Then contact us today, get the answers that you need and let’s start building excellence.

Building a Brighter Future Through Nonprofit Construction

mmcrebuildstg on August 5, 2024

Grove City Library is one of many non-profit construction projects completed by Miles-McClellan

One of the most satisfying aspects of our work in the construction industry is getting to see firsthand how our projects improve communities and make an IMMPact. Nonprofit construction is especially rewarding for our team, as nonprofit construction is driven by the mission to create spaces that empower residents, improve quality of life and improve safety, which aligns with the values our company has held for over 46 years.

Our work in nonprofit construction covers a wide variety of different structures, including community centers, parks and healthcare centers. While nonprofit construction is incredibly rewarding, at times it can present a variety of unique challenges. Proper planning and strategy are key.

In this blog we outline our top tips to help your next nonprofit construction project go smoothly and be successful.

Make Sure the Vision is Clear

Before ever breaking ground, make sure all goals, objectives and uses for this space are clearly defined. Will the space have multiple uses? What purpose will it ultimately serve? What budget constraints could arise? Making sure everyone is on the same page as far as vision is incredibly important, and when it comes to nonprofit construction, that vision must remain agreed upon and consistent amongst multiple people, including nonprofit staff, board members, community leaders and stakeholders.

Secure Funding Early and Develop a Realistic Budget

Funding is a crucial part of construction in any industry, but it can be especially complex for nonprofit projects. Nonprofit funding usually comes from a combination of grants, donations and loans, and all of that should be secured before construction begins. All involved with funding should receive full transparency about the project’s goals, timeline and financial needs, and project teams need to develop a detailed and realistic budget that accounts for all aspects of the project, including permits, materials, labor, contingency funds and potential delays.

Document Everything

Because nonprofit organizations have a variety of different stakeholders they must answer to, keeping detailed records of all communications, contracts, permits, change orders and financial transactions is essential. This documentation will be invaluable for accountability, and reporting to funders, the board and government agencies.

Stay Transparent

We’ve said this before, and we’ll say it again – transparency should be a priority on any construction project!  Establish a communication plan from the very beginning that includes regular updates and open lines of communication for the key players involved. This builds trust, ensures everyone is on the same page, reduces mistakes and builds excellence.

Keep the Community Involved

Don’t forget that the end goal of nonprofit structures is to support the community, so let the community know of important updates! Showcase on your website, newsletters, emails and social media platform all of the milestones of the project. The community will love hearing about the progess of the project, and may have valuable feedback that could be useful!

We Are Doing Our Part to Make a Difference!

Nonprofit construction has a special place in our hearts, because making an IMMPact in the community is an important part of our values. In fact, as a company we support 58 non-profit organizations, provide paid internships, offer apprenticeships and mentoring, support our employees’ causes monetarily and allow them to volunteer during work hours.

How can we help ensure your next nonprofit construction project lives up to your vision? Contact us and let’s discover how working together, we can change lives!

Construction Manager at Risk Vs. Design-Build: What’s the Best Method for Your Next Project?

mmcrebuildstg on June 25, 2024

Construction Manager at Risk Vs. Design-Build

In construction, the first step in any project is determining a project delivery method that ensures the best outcome. Two popular methods that we offer at Miles-McClellan Construction are design-build and construction management at risk (CMR), which while similar in some respects, also have distinct differences that can be the defining factor in executing a project that is well-planned, goes smoothly and leaves all involved feeling satisfied with the results.

Keep reading to learn more about these delivery methods and when they are best utilized.

An Overview of CMR and Design-Build Project Delivery

First, it’s important to understand how these methods are different on a base level. With CMR, one of our skilled project managers commits to delivering a construction project within a guaranteed maximum price (GMP). That construction manager will be your consultant throughout the project, doing whatever it takes to ensure that all aspects of the projects are being handled properly and that there is a smooth transition from one phase of a project to the next.

With design-build project delivery, the design-build contractor teams with the chosen architect to complete construction based on your project needs and wants. Because of this partnership between contractor and architect, an established guaranteed cost is provided early in the process, allowing you to secure funding faster.

Advantages of CMR

Every strategy has its unique strengths. Let’s explore those in a CMR collaboration. 

  • If you have an architect who has worked well for you throughout the years, CMR allows you to continue working with the architect who understands your business and vision, while the contractor keeps that vision within budget.
  • Because the construction manager is involved early in the project, they can provide valuable input during the design phase, which can lead to more accurate cost estimates.
  • When a GMP is established from the very beginning, overrunning the budget is less likely.
  • CMR fosters a sense of collaboration with everyone involved in a project, including, owner, designer, architect, stakeholders, etc., which leads to better communication and problem-solving.
  • With CMR, the owner sets and leads the design while being financially responsible, giving the owner more control.
  • We recommend CMR as the form of project method delivery for more hands-on owners.

Advantages of Design-Build

Now let’s explore the benefits of design-build project delivery.

  • If your construction project contains multiples of the same type of building (for example, maintenance complexes, a tradition K-12 school, banks, and public institutions such as fire stations, police station, post offices, etc.) design-build is a very effective choice.
  • The design-build contractor holds all of the risk for the owner by contracting with both the architect and subcontractors.
  • With design-build, the design-build contractor and architect are partners, creating a situation that requires less checks and balances.
  • Design-build can significantly reduce the overall project timeline, as both the construction and design phases of a project take place at the same time.
  • We recommend design-build for owners who want to focus on their business instead of taking on the responsibilities of the construction on a heavily funded project.

Still Have Questions? Let Us Put You on the Right Track!

Overall, there is a give and take to both delivery methods that should be taken into account when considering your next project. If you still have questions and would like insight from construction experts with decades of experience, contact us today and let’s build excellence while finding your ideal construction solution!

2024 Q1 Economic Indicator

mmcrebuildstg on June 11, 2024

2024 Q1 Economic Indicator
Contrary to earlier predictions of a recession in early 2024, the AIA and FMI now suggest a potential slowdown in the back half of 2024. While our indicators do point to a deceleration, our internal data and anecdotal evidence consistently demonstrate the robustness of the construction industry, which does not align with the notion of a significant downturn.

To summarize the AIA and FMI reports, they expect an increase in construction spending between 2-3% in 2024, followed by a rise of 1% in 2025. Accounting for the anticipated slowdown of construction over the next two years, the AIA points to three factors that, when combined, cause banks to tighten up lending, resulting in difficulty in getting projects started:

  1. Rising long-term interest rates.
  2. Higher construction input costs with input prices remaining 35% to 40% higher than pre-pandemic rates.
  3. Construction labor costs are continuing to rise at a 4% annual pace.

Despite the AIA Billing Index remaining below 50 for 9 consecutive months and the Dodge Momentum Index staying low for the past 10 months, the Charlotte and Columbus construction markets are still brimming with potential. Contractor backlogs, as measured by ABC and FMI, saw an increase at the end of Q1. This positive trend is mirrored at Miles-McClellan, where our backlog is higher today than it was at the end of Q1.

As you read the full report, you will learn more details about these numbers and trends.

Recent MM Bidding Experience

Immediately below is a summary from one recent bid effort, but it indicates what our teams are experiencing as they continue to price projects for our clients actively.

Sharing a recent bidding experience, Brad Bloomberg, MM Vice President, expressed, “Our most recent bid was for a local office remodel in downtown Columbus. The project primarily focuses on updating elevator lobbies, restrooms’ finishes, lighting, and ceilings. We had a prequalified list of limited subcontractors invited to the project. While the coverage was average on drywall and fire suppression, we received feedback from painters, electricians, and HVAC contractors that they were too busy with the existing backlog over the summer months to take on any new work.”

  • Painting: 2 bidders of the 7 invited.
  • Electrical: 2 bidders of the 10 invited.
  • HVAC: 1 bidder of the 10 invited.
  • Flooring: 2 bidders of the 6 invited.
  • Drywall & Demo: 4 bidders of the 5 invited.
  • Fire Suppression: 3 bidders of the 6 invited.

This level of bidding activity is typical for the summer months. We will monitor the trends and report on contractor backlogs in Q3.

Read the Report

Building Excellence from the Beginning: The Benefits of Construction Management at Risk

mmcrebuildstg on May 2, 2024

Construction Management at Risk

For over 46 years, our customers have trusted us to build excellence and find smarter solutions for all their construction needs to ensure the best possible outcome for any project. With comprehensive Construction Management at Risk (CMR) services, our strategic approach to crucial components of a construction project that include project and risk management, project cost estimate and budgeting and design and engineering services, we help our customers minimize risks, control costs and get projects completed on time and at the highest standard of excellence.

How Does Miles-McClellan Construction Approach Construction Management at Risk?

As with all of our projects, the process begins with one of our talented leaders serving as Project Executive and committing to delivering a construction project within a guaranteed maximum price (GMP). From there, the Project Executive takes on the role as consultant throughout the development and design phase, and does everything possible to ensure a project is prepared and ready to enter the next phase.

How Can Construction Management at Risk Benefit My Next Project?

In our experience, CMR with Miles-McClellan Construction provides several benefits that ensure a project is successful from beginning to end. These include:

  • Projects Completed on Time – When a construction manager is involved early in the process, they can optimize the construction schedule and plan for multiple aspects of a project, including delivery of materials, procuring labor and equipment, coordinating various timelines, etc. Ultimately, this allows for increased speed of project execution.
  • Construction Managers With Decades of Experience – Our construction managers have decades of experience, and are dedicated to client satisfaction and building excellence. They have worked with clients of all sizes in all industries, and found ways to overcome a variety of construction challenges. Learn more about their approach to construction and why they are the best in the business.
  • Enhanced Synergies Between Stakeholders- Talented construction managers have the ability to foster a culture of collaboration and transparency amongst stakeholders involved in a project, which allows stakeholders to identify areas for improvement and construction managers to adapt and plan for changing project requirements. This goes a long way in enhancing stakeholder satisfaction.
  • Cost and Pricing Transparency- As stated earlier, one of the hallmark features of CMR is the creation of a Guaranteed Maximum Price (GMP), which provides owners with cost certainty and transparency and ensures that projects remain within allocated budget constraints. This requires significant planning and cost monitoring from construction managers, and helps minimize the risk of budget overruns.

Ready for Project Success? Then Ask About Our Construction Management at Risk Services!

We believe in building excellence before construction ever begins and have the talent and expertise to provide a seamless and efficient design process that leads to exceptional results. Contact us to learn more about our CMR services and experience on time, on budget construction!

Miles-McClellan Construction Vice President Matt Recchiuti Discusses His Experience Working With Industrial Clients

mmcrebuildstg on April 9, 2024

The construction landscape is vast and diverse. While it certainly includes those impressive commercial skyscrapers, remarkable retail centers and highly anticipated residential complexes, there is one realm of the industry that doesn’t always get as much media attention but is equally as important – the industrial sector. Industrial construction includes manufacturing, distribution, factories, power plants and other specialized facilities. Industrial construction structures, and the many fields and industries they allow to do the important work they do, are the backbone of this country and lay the groundwork for economic growth and future innovation.

In this interview with Miles-McClellan Construction vice president Matt Recchiuti, he sheds light on his unique journey working with industrial clients and best practices for building excellence in the industrial construction sector.

Let’s Dive Into Matt Recchiuti’s Industrial Construction Journey:

What experience do you have working with industrial clients?

The majority of my career has been spent in the industrial sector. I’ve worked with Honda, The Scotts Company, Core Molding Technologies and Hirschvogel among others. Whether it’s a new build in a green field, or a renovation/addition in an existing facility, the planning and coordination to manage our construction schedule with the daily operations of our industrial clients, and meshing the two together, is what is the most satisfying.

Why do you like working with industrial Clients?

Over the past 19 years, I have been able to build long-lasting relationships with our industrial clients built on trust, respect and confidence in Miles-McClellan Construction and our team. They know that we understand their needs and unique requirements while also recognizing that production is king, and we are merely secondary in their daily planning and preparation. The challenges that exist in trying to coordinate a schedule and daily activities, while appreciating their management team’s priorities and deadlines is what makes my team’s job rewarding.

What do you bring to the table – why would a client want to work with you?

Experience!!! The myriad of projects that our team has completed in occupied facilities without stopping production allows us to bring about solutions and know how to solve their unique and ongoing needs to fit out their space, all while not sacrificing their goals and quotas. Understanding that even the most well thought-out plans will encounter hiccups or unforeseen challenges that add more complexity. Finding a way to navigate around those challenges and pushing toward the finish line is what makes our job exciting and rewarding.

Can you name an example of “how you saved the day” for a client?

We save the day with each and every time critical, “must be done by” scenario that we are presented with, when we find a way to complete the project on time when there doesn’t appear to be a chance in hell of hitting the schedule goal. Often, we are only given a week or a small shutdown window to complete our projects because production starts back up on a certain date. The scheduling of multi-shift, around-the-clock operations, which often includes scheduling activities by the hour, and coordinating all of the trades along with other ongoing projects, is where my team excels.

Specific advice for those in the construction industry working with industrial clients?

Understand that no job is impossible. There is usually always a way if you’re willing to look at alternative solutions and find a new way of doing something that is outside of the norm.

We are proud of our work within the industrial sector, and have seen firsthand how it helps the community and benefits society. If you have an industrial construction project or would like to learn more about our approach to industrial construction, contact us today!