The 50 States of Construction: How UT contractors capitalize on booming population growth
Layton Executive VP Bryan Webb explores the factors behind Utah's strong economy and the challenges facing its construction industry.
Editor's note: This article is part of Construction Dive's 50 States of Construction series, in which we talk with industry leaders across the U.S. about the business conditions in their market.
Utah is the fastest-growing state in the U.S., with its population increasing 2% between 2015 and 2016. That might come as a surprise to some, but for residents and companies in the state, they have no trouble believing it.
Utah's business-friendly environment, access to outdoor activities and relatively low cost of living has spurred a strong economy — and, with it, a booming construction market, according to Bryan Webb, executive vice president at Layton Construction.
Layton, one of Utah's largest contractors, has offices nationwide, with more than 800 employees across the U.S. and $1.2 billion in revenue in 2016. It specializes largely in healthcare, higher education and detention facilities.
Construction Dive spoke with Webb about the projects that sustained Utah's construction industry during the recession, the factors that have created a vibrant state economy today and the unique opportunities in the Utah market.
Editor's note: This interview has been edited and condensed.
How does the Utah construction industry differ from that of other states?
WEBB: It’s difficult for out-of-state firms to come in and compete. [Owners] like to use home-grown organizations to work here. A lot of the work that’s done in the state is very relationship-based. It’s a competitive environment, and it’s a vibrant economy. Forbes has ranked Utah the number one place for business six out of the last seven years. The state has done a really good job of being business-friendly and having opportunities for us. It’s a pro-business legislature, a pro-business governor and a pro-business local government. The best thing they’ve done is to let us do our work, get out of our way and let business run itself.
What factors are contributing to that vibrant economy?
WEBB: The legislature has done a good job of setting up good tax incentives for businesses. The energy costs here are very low. The workforce is really strong; it’s a young vibrant workforce. Utah is known to have large families, so the population from growth within families is big, but there’s also been big net-migration into the state. We’re one of the fastest-growing states, with people moving in and also the natural increase with families. One of the big issues of concern within the state is the shortage of housing that’s available right now. The residential builders are going fast and furious, and the multifamily market is booming.
How did the recession impact the state and its construction industry?
WEBB: We were certainly impacted by the recession like everybody else, but we weren’t as high when it started and we didn’t come down as low when it bottomed out. Utah had some big projects at the time that really helped to keep construction workers employed. City Creek was a billion-plus-dollar development in Salt Lake City [that started] right as the recession happened. That kept a lot of people employed. Right after that, the government brought in a big data center, then the Salt Lake City [International] Airport kicked off its [revamp] project. Then the new state prison contract was awarded. We have been fortunate to have major projects line up, one after the other, that have been good for the economy and the construction industry. The rest of the market did slow down, but the trough wasn’t near as deep as the rest of the U.S.
How did the downturn impact the current labor environment?
WEBB: Although we had those big projects to carry us through, a lot of work slowed down. As a result, a lot of people left the industry, particularly the subcontractors. When we started picking up work, they didn’t come back to construction. They had found employment other places.
How has that tight subcontractor market impacted your business?
WEBB: You have to really plan effectively, and you have to be very close to the subcontractors to understand the manpower they have available for your project. I have seen subcontractors that have stretched themselves too far and too thin. Throughout the state, the shortage of subcontractor manpower is a big concern.
In addition to a strained subcontractor market, are you having difficulty filling other positions within your company?
WEBB: We’re always challenged for hiring high-quality superintendents and project managers with experience. A lot of students [in construction management programs] saw that there wasn’t a lot going on in construction [during the recession], so they changed their majors. Now there’s a gap there for that age group to come in and fill the pipeline. That experienced project manager and superintendent is a very sought-after position. We constantly are on the lookout for those individuals. We’ve also got to be recruiting.
What message about Utah do you try to convey to candidates when recruiting out-of-state?
WEBB: It’s a good place to raise a family. It’s got a lot of outdoor recreational opportunities. The commutes are a lot easier than on the coasts. Those selling points resonate with a lot of people.
What have been some of your favorite projects to work on, and what opportunities are you excited about looking ahead?
WEBB: There’s a lot of [resort work] going on right now, particularly up in the Park City area. Those are fun, challenging environments, with short summers and long winters. In fact, we finished the [Faena District West] project in Miami that was built a little below sea level, then we finished [The Summit at Snowbird] in Snowbird, UT, at the same time on the very top of a mountain. We joked at the time that we were pouring concrete at below sea level and just over 11,000 feet above sea level at the same time. There’s probably not a lot of companies that have done that.
There’s a gamut of different opportunities coming up in Utah, and that’s what makes it fun. There’s always something in the pipeline. It may not be the enormous projects that California or other states see, but there’s always something fun being built here.