This article is part of Construction Dive's 50 States of Construction series, in which we talk with industry leaders about the business conditions in their markets.
North Carolina just might be exemplary of all that is paramount to the construction industry in 2018 and that means both the good and bad.
The Research Triangle Regional Public Transportation Authority (GoTriangle) is making headway in obtaining the agreements it needs to build a $2.5 billion light-rail system from Durham to Chapel Hill, and officials at Fort Bragg, a U.S. Army installation near Fayetteville, recently unveiled a planned $700 million program of construction that will take place during a period of six years.
The $7 billion Atlantic Coast Pipeline is carving a path through the state, though it has had to deal with some regulatory work stoppages, and there is about $2.5 billion of construction going on at Charlotte International Airport.
Some state lawmakers are working on a bill that would likely increase the number of construction projects in North Carolina by upping the per-employee corporate relocation incentive from $6,500 to $16,000 through the proposed Job Development Investment Grant program. The incentive would apply to positions paying $150,000 or more and, according to the News & Record, was introduced after North Carolina lost out on one of the two $2.5 billion Amazon HQ2 awards, as well as new headquarters for AllianceBernstein, Core Construction, Edible Arrangements, Norfolk Southern and General Electric.
The problem is that there just aren’t enough construction workers, a familiar story in much of the industry. Add to that equation a natural disaster — Hurricane Florence — that caused significant flooding in the state earlier this year and North Carolina finds itself in both an enviable and precarious position. The damage from the storm in North Carolina alone is estimated at $17 billion.
Dave Simpson, as president and CEO of the Carolinas Associated General Contractors, has a unique view of it all and recently talked with Construction Dive about construction in North Carolina.
This interview has been edited for clarity and brevity.
CONSTRUCTION DIVE: Is the big story in North Carolina right now Hurricane Florence recovery?
DAVE SIMPSON: What is basically going on in both Carolinas is that the construction industry was booming before Florence came. There was a severe workforce shortage, and now that is being aggravated by the billions of dollars of damage.
How has the government response been after the hurricane?
SIMPSON: There has been a lot of bipartisanship from the governor and the legislature and Congress [and a recognition] that North Carolina, as well as South Carolina, was hit hard. You are not hearing New Orleans-Katrina-like stories where people are just not getting tended to, but there are a lot of folks in Eastern North Carolina that are having a really tough go of it still. The biggest impact, it seems, from Florence has been the pressure on labor, on the subs — people to do the work.
You have got a perfect storm where construction was booming, and there were not enough workers. And then you throw in a multi-billion-dollar disaster named Florence and that just makes things all the more challenging.
So how do you fix the problem of booming construction and not enough labor? Or can you?
SIMPSON: We have this thing called Build Your Career. The idea is you get people in the construction industry to get out from behind their computers and off jobsites and go into the elementary schools, middle schools, high schools and community colleges to promote construction as a career. There are literally tens of thousands of jobs out there in North Carolina and South Carolina [that] need to be filled right now. And they are well-paying careers.
So we are working closely with the North Carolina Community College System to kind of rebrand construction as a place that is an outstanding career for young people. And we are having success. The North Carolina General Assembly approved $200,000 last year [for the community college system] to help promote construction as a career. And we are heavily involved in that.
People are coming here. They want to live here, so you’ve got to build stuff, and you need people to help build it, whether it be buildings, shopping centers, schools, hospitals, libraries, streets, highways or utilities. It is all being strained.
What’s the message about a career in the construction industry that going to work with young people in North Carolina?
SIMPSON: I think the biggest obstacle is not knowing what is really out there. Sure, you are going to get muddy, and it is going to be cold, and it is going to be hot. But it is much more than leaning on a shovel or paving a road. Construction is a very challenging and excellent career that involves skills, thinking, technology and problem solving. There are just so many things that you can do, and the need is so great.
North Carolina has a huge variety of construction projects underway and in the pipeline. What’s drawing people and businesses to the state?
SIMPSON: Every other day, it seems, you will pick up some kind of report that ranks North Carolina extremely high for places that people want to live and work. Money magazine a couple weeks ago said that the No. 2 place to live is Raleigh as far as good quality of life. Everyone wants to live here.
How is North Carolina handling the strain on infrastructure and other resources from all the people moving in?
SIMPSON: The North Carolina legislature approved this year what amounts to $3 billion for transportation funding. Voters [in Wake County] in November approved more than $1 billion for schools, parks and infrastructure construction. People are willing to pay more for the services that are needed.
Is there a standout construction challenge ahead for North Carolina, aside from hurricane recovery?
SIMPSON: We are not keeping pace with our infrastructure needs. Raleigh a couple of weeks ago had a serious issue with sewage going into the creeks and rivers, and it was the result of dilapidated city utility infrastructure. This kind of stuff is going to continue happening all over North Carolina and South Carolina and the nation if we don't do what needs to be done.
When you add on top of that the fact that the population continues to grow big time because everybody wants to live here, that adds to the already wild construction mix we have. The infrastructure needs are only going to get worse, and I think you are going to hear about and read about more and more instances where failing infrastructure is causing all kinds of problems.
It's sexy to have nice roads and nice buildings and nice infrastructure. We need to place more emphasis on that. This issue is not going to go away.