Build Me Up: Construction Industry Outlook with Rich Jacobson and Jay Bowman
The latest Build Me Up podcast features a discussion with Rich Jacobson, Executive Vice President at Kraus-Anderson Construction, and Jay Bowman, Managing Director of Research at FMI Corporation. The two leaders discussed industry trends, challenges and outlook heading into 2020.
Meet Rich Jacobson and Jay Bowman
Rich Jacobson leads Kraus-Anderson’s Minnesota offices in Minneapolis, Bemidji, Duluth and Rochester; and regional offices in Madison, Wisconsin and Bismarck, North Dakota. He joined Kraus-Anderson as a project manager in 1992 and has managed major construction including schools, healthcare, retail, hospitality, recreational, industrial and residential projects. He is a skilled consensus builder, guiding forward momentum among school boards and diverse stakeholders; and works seamlessly with all levels of government, keeping approvals, codes and adjustments running smoothly.
As a principal with FMI, Jay Bowman assists a broad range of stakeholders in the construction industry, from program managers and general contractors to specialty trades and materials producers, with the identification and assessment of the risks influencing the strategic and tactical decisions they face. In this role, Jay’s primary responsibilities include research design and interpretation, based on developing an understanding of the context within which these organizations operate. These draw upon many of the research services he oversees, including market sizing and forecasting, buying practices and preferences, and competitive behaviors and response.
Addressing the Workforce Shortage
It’s difficult to discuss the outlook of the construction industry without acknowledging the challenges of the labor shortage in skilled trades. This issue has been affecting construction for decades, and while both leaders agreed that they don’t predict an easy solution in the coming years, there are initiatives that firms can be taking to attract and retain talent within the industry.
Educating the younger generation about opportunities for well-paying trades positions, as well as breaking the stigma surrounding not going on a traditional 4-year college path, are a start. The student debt rate is higher than ever before, and now totals more than the total construction spending in the U.S. in a given year.
Developing and retaining the talent within companies is becoming critical as well. While some industry employers may fear that their employees will leave the company once they have developed their skills, FMI’s research shows that the opposite is actually true. The younger generation puts a lot of value in continued education and professional development, and they are more likely to leave a firm that doesn’t put emphasis on nurturing their skills. Kraus-Anderson provides a number of professional development opportunities available for employees, including classes offered through Kraus-Anderson University, and Leadership and Executive Development Programs.
While the industry is also turning to technological advancements such as like robotic equipment, to address the shortage of trades professionals, both Jacobson and Bowman agree that a cultural shift is necessary in order to attract people to the field.
The Cost of Affordable Housing
The affordable housing crisis is affecting the entire country, and Rich and Jay discussed the challenges building affordable housing units. Rich discussed Kraus-Anderson’s affordable housing project Chamberlain Apartments in Richfield, which was made possible through funding support from the city. The apartment campus blends affordable and market-rate housing in an amenity-rich environment. Both leaders agreed that public funding is necessary to address public housing, due to the continued rising cost of construction materials.
The Chamberlain Apartments blend affordable and market-rate housing
Tune into Build Me Up for more
Check out the latest episode of Build Me Up, featuring Rich Jacobson and Jay Bowman, to hear the two leaders discuss the future of modular construction and prefabrication, the country’s economic outlook, and more!