In litigation, an attorney’s success is often tied to his or her ability to “think like the other side.”
Contractors, too, have an opportunity to secure a winning edge by placing themselves in the customer’s shoes, whether that is a government agency, commercial owner or homebuyer.
In 2024, the Northeast Florida contractor’s customer is frustrated; the dollar is not going as far as it has in recent history and certainly not as far as the customers would like it to go.
Construction costs are high. Money is more expensive to borrow. Projects that made great sense four or five years ago are not as easy to pencil without incentives.
So how can contractors leverage the shifting market and gain an advantage over competitors?
Take care of your employees, subcontractors and suppliers
The demand for construction labor and skilled trades are at an all-time high, while the available supply is at an all-time low.
Contractors with talented employees and dependable subcontractors/suppliers should focus on retention and relationship-building.
On the internal side, offering a client your “A Team” will lead to higher trust, better performance and an increased likelihood that a partnering approach will proceed successfully.
On the external side, reliable lower-tier partners will allow contractors to remain confident in their sequencing, scheduling and budgeting — again garnering trust with the owner.
On both fronts, contractors who can reduce turnover will be in the best position to balance risk and avoid disputes in every direction.
Stay current on technology
In a high-cost market, a contractor’s ability to maximize and persuasively present value is crucial.
When there is no “give” in material pricing, implementing digital construction technology presents major opportunities.
For example, rather than charging an hourly fee for a field employee to methodically capture, log and report daily progress photos from a limited vantage point, deploying drones allows contractors to present high-definition photo and video progress updates in real time and from angles and heights previously not possible or efficient to provide.
Particularly in the context of commercial projects and residential developments for future end-user sale, owners may also find value in drone footage for marketing and advertising purposes, presenting another layer to this approach.
From quality assurance to sales content, low-cost technology is a value-add that should not be overlooked.
Offer sustainable products
When immediate savings are not on the table, contractors who can offer future savings will stand out.
Renewable energy, eco-friendly materials and greenscapes are opportunities to reduce long-term costs and, in some instances, qualify the project for incentives, both of which can help lighten an owner’s financial pressure in the overall package.
Be prepared for the material cost roller coaster
After a period of calm, upward price pressures are reemerging. As the Associated Builders and Contractors published in its March news release, overall construction input prices are 1.5% higher than a year ago, nonresidential construction input prices are 1.8% higher and inflation data is coming in hotter than anticipated.
Brick, tile, gypsum and steel are categories with apparent jumps.
Contractors who can think ahead, prepurchase materials and lock in prices at key points in the fluctuation will stand out to owners as industry experts and good stewards of project funds.
Know where the Northeast Florida markets are going
By all accounts, the region continues to display strong economic health.
Contractors who stay focused on growth areas can expect strong business opportunities as the year rolls on.
Residential, multifamily and condominium markets will continue to expand given low vacancy in comparison with population growth. Industrial projects will surge as reliance on e-commerce drives demand for logistics and distribution centers.
High volumes of migrating professionals with higher disposable income and a desire for community integration will lead to a retail sector revival.
Contractors who can present themselves as the industry experts that owners want will ultimately prevail as the partners owners need in 2024.
Kellie Humphries is a board certified commercial construction attorney in Gunster’s Jacksonville office. She advises clients across multiple industry sectors including corporate owners, design-builders, EPC contractors, joint ventures and general contractors on strategies to serve their legal and financial interests.