The 50 States of Construction: JE Dunn CEO Gordon Lansford on MO's construction revival
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.
Although its recovery has been drawn-out, Missouri is rebounding from the recession and has its diversified economy to thank. The state's unemployment rate was below the national average at 4% in August, while its gross state product is on the rise driven by gains in manufacturing, real estate, healthcare and even clean-energy production.
The state's construction market is simultaneously benefiting from and driving that growth, with a host of projects underway. Among them is the $1 billion terminal overhaul at Kansas City International Airport and the $4.5 billion office complex underway for medical software company Cerner, based in the Kansas City area.
To get a sense of where Missouri's construction industry is headed, we talked with Gordon Lansford, president and CEO of Kansas City–based JE Dunn about new growth markets, how the company is handling the labor shortage and the biggest challenge of building in the state.
This interview has been edited and condensed.
Where in Missouri are you seeing the strongest activity right now?
LANSFORD: We're seeing a lot of activity here in Kansas City. We've completed the first major phase of the Cerner Innovations Campus and we're getting ready to kick off the second phase. Cerner is one of the world's leading medical software providers and they're based here. That campus could be the largest economic development project in the history of the state.
We've seen a lot of transition in our downtown over the last 10 years and that continues with more multifamily remodels and high-rise towers, as well as hotels, restaurants and entertainment venues. We just broke ground on the first high-rise in the trendy Crossroads neighborhood, a luxury apartment building called ARTerra.
We were not on the team selected to build the new Kansas City International Airport terminal, but that will be a major project for our construction community.
Around the state, it's a lot of the same types of projects. In St. Louis, there is a lot of healthcare, education, mixed-use and hospitality.
Of all that activity, what wasn't happening a decade or so ago?
LANSFORD: The urban housing and mixed-use markets have really picked up, and there's a lot going on in hospitality. We're getting ready to start the 800-room Loews Kansas City Convention Center Hotel. Healthcare and education, while they remain strong today, have been active over that 10-year period.
Is there a difference between urban and rural needs and investment throughout the state?
LANSFORD: The biggest demand statewide is for infrastructure and roads. From a rural perspective, a lot of districts are investing in new elementary, middle and high schools, as well as renovations. We have activity in rural healthcare, critical-access hospitals and the like, and then certainly some of the suburbs are seeing a lot of retail and mixed-use projects.
What's the biggest challenge facing construction companies operating in Missouri?
LANSFORD: The biggest challenge nationwide, and it's certainly no different in Missouri, is the shortage of skilled labor. That's only going to be compounded by what's happened in Houston and [has now happened] in Florida. There is huge demand for and not as great a supply of skilled labor.
What is JE Dunn doing, if anything, to increase the supply of workers in construction?
LANSFORD: We now offer healthcare coverage to our skilled labor and their families after 90 days rather than after a year. We also developed an online portal for our skilled labor, which we call Construction Connect. Every employee that gets a paycheck from us now has a JE Dunn email address so we can directly communicate with them. And we continue to develop a longer-term strategy on how to train skilled labor, particularly in non-union markets where we don't have a built-in training platform.
How do conditions in Missouri compare to elsewhere you're building?
LANSFORD: We're not seeing the rapid growth in Missouri that we are in the South, Southeast and Northwest. Missouri, and the Midwest generally, is more stable. In other parts of the country, the shortage of labor is requiring us and our trade partners to be more selective in what we take on to make sure we have people to complete the projects successfully. We don't have to be as selective in the Midwest as we do in more rapidly growing parts of the country.
What rules and regulations in the state have the biggest impact on how you build?
LANSFORD: Right-to-work is probably the biggest one in Missouri. While we don't do a lot of infrastructure work ourselves, all the talk about infrastructure in Washington, DC, will create a lot of jobs while also further exacerbating the labor issue we're seeing in Missouri and around the country. And then we're all keeping an eye on the economy. Our [state] economy has done very well but it seems to be based on consumer confidence and momentum, and that can change at any moment. We're thankful for the opportunities we have today but we're keeping an eye on economic drivers that could impact us two or three years out.
What sets Missouri's construction industry apart from other states?
LANSFORD: The stability. We don't see a lot of the highs or the lows, so it's been a good, stable market for us and others that operate in Missouri.