Earl R Hall, Executive Director – Syracuse Builders Exchange
By most measures, 2023 was a strong year for construction industry employers throughout upstate New York. Measuring growth can be subjective, however, the increase in membership at the Syracuse Builders Exchange is one standard metric which is objective. Membership increased to 970 at the end of 2023, with 42 new member employers joining during the year. Today, the Syracuse Builders Exchange remains the largest construction industry Association in the state of New York.
Another metric used to measure growth is the total number of building projects for bid compared to 2022. Building projects for bid increased 3.6% from 5,064 in 2022 to 5,244 in 2023. The increase was driven by continued public investment in the medical, secondary and higher education markets, coupled with strong private capital investments in the industrial, multi-family residential, and commercial markets.
Central New York is poised to continue sustained construction growth into 2024 with many regional project owners beginning work on such projects as:
- Onondaga County STEAM School
- Turning Stone Expansion
- Onondaga County Aquarium
- Syracuse Inner Harbor Development
The continued optimism associated with regional economic development, coupled with increased construction bidding opportunities, is somewhat tampered by a potential recession, lack of adequate skilled labor, increased material costs and aggressive project schedules. The construction industry is not immune from periodic challenges, but contractors have proven to be resilient over the past century as they continue to deliver finished projects to owners.
Labor will continue to be the most concerning matter going into 2024 as the lack of skilled craftsmen and craftswomen may impact contractors’ abilities to bid additional work and/or to complete tight schedules on time. Although the building trades’ unions and non-signatory employers have been aggressively attempting to recruit, train, and retain construction workers, such efforts have not produced a labor pool large enough to accommodate the current projects scheduled to being in 2024. There remains much optimism the abundance of work will attract skilled craftspeople from other geographies throughout the United States.
Labor wages continue to increase at rates upstate New York has rarely seen. Wage increases vary by trade but have averaged close to 4% per year in the past two years, and in some cases higher. Such wage increases have been driven by high inflation, huge demand for skilled labor and significant increased costs associated with food, gas, and clothing. Labor costs and the availability of skilled labor will continue to be of concern throughout the year.
The anticipated economic development to hit central New York will be led by the construction industry. Although many leaders in the secondary and higher education arenas are focused on careers inside these yet to be built new buildings and facilities, those project owners need to first build those facilities. Most suburban school districts are a decade behind in developing career and technical education programs, in particular construction career pathways. And while regional BOCES programs remain vital to the construction industry, those student seats are limited. The need for a four-year construction curriculum is essential in developing the next generation skilled workforce contractors and project owners desperately needed. The only way to meet the incredible economic development opportunities that await central New York is to have the skilled work force to build those projects.
These issues are not unique to upstate New York as such is prevailing throughout the country. Although such headwinds are anticipated to continue in the short term, contractors and project owners alike remain resilient and will explore developing alternative methods to deliver a finished project.