On-Demand: Construction - Current Market Issues and Trends

December 15, 2021

In Part II of this series, join EisnerAmper and Cumming Group as we discuss labor trends, how technology is changing project delivery, and how the market continues to recover from the impacts of COVID-19.

 

 


Transcript

Barry Watson:Hello and welcome back to part two of our webinar series, this one title Current Market Issues and Trends for Businesses and Personnel That Serve in the Construction Industry. My name is Barry Watson.

I'm CPA and Director here in the Dallas, Texas office of EisnerAmper and will be your host and moderator today. Today I'm joined by Meloni Raney, President and CEO of TEXO, as well as Daniel Pomfrett, Vice President of Cumming Group. Since 2015, Meloni has served as President and CEO of TEXO in Dallas, Texas, the largest commercial contractor's association in Texas.

TEXO provides world-class industry communication and training in areas such as safety, insurance, cost saving programs to help reduce costs and projects for project owners. TEXO also provides innovative programs, quality of services, strategic alliances for contractor and industry members in Texas.

Daniel, whom you met in part one of the series, offices with his company, Cumming Group, in the greater Chicago area since 2013 and serves as an advocate of the company's project management and cost consulting clients by solving problems, driving solutions, and delivering results.

Our agenda today is to hold a round table dialogue with these panelists over some current market issues that the construction industry is facing today, and hopefully provide some keen insights on how we're seeing contractors are facing them.

Meloni and Daniel, thank you so much for volunteering your time to be with us today.

I'll start off with the first question. What have you both seen in the market of how contractors are coping with increasing material and labor pricing? Does it make sense for project owners to pay contractors to pre-purchase key materials up to avoid cost shocks down the line, or are there other alternatives?

Meloni, how about we start with you on that question?

Meloni Raney:All right. Sounds good. We've really had a perfect storm of things that have hit the construction industry all at the same time. COVID kicked off a lot, but before that we already had a labor shortage, and then now you're adding the supply chain issues and the rising cost. It really is, unfortunately, a perfect storm of several different issues. I think the construction industry, really, the AEC industry overall has had to get really creative in the way that they respond and the way that we're making sure that we continue to build. Thankfully, that's in our DNA as an industry. It's just kind of what we do. We problem solve. But I think people have had to look at all sorts of different options. You're having to go find almost anybody that you can to come in and train them to be in the industry. You're trying to acquire materials that you may not need until a year from now. You're just having to get creative, and you're having to lean on the relationships that you've been building in this industry.

A common thread that I hear amongst most contractors that I chat with is they're leaning on those relationships, so they're being very transparent. They're documenting everything. They have continual conversations with suppliers, and they're truly leaning in of, this is the current state of where we're at and we have to be open and honest and transparent and figure out how to progress together. We're all in this together. We need each other. I wish that there was a silver bullet, but I think the biggest thing is being transparent, and then open and honest, and having those relationships where you are, just being completely up front. And anything that you can procure early, I think that people are doing that. The construction industry has turned into a lot of housing for supplies, just because you never know when you're going to need it.

Barry Watson:Sorry. Definitely so. Procuring that type of material is - You got to think about where you're going to store it and is it secure. Are you going to store it on the job site or do you have a warehouse? That creates another issue for them. Daniel, what is your take on this issue?

Daniel Pomfrett:I would echo what Meloni says. What we have seen in the industry has been a real togetherness in terms of how to work through this - Particularly this pandemic period and the resulting issues that we've seen in labor and material. And everyone has been working together through it. On the ground, from the projects that we see, we've seen very few adversarial issues coming up, like claims related to the pandemic and costs associated with it. But the big thing is that communication and keep it open.

I think to your point, do you buy materials up front? That's a very interesting question and I think for us, it's very much a case by case basis because you've got to look at the cost versus the benefit. You mentioned how do you warehouse it? How early do you buy that? And what happens if you buy it and then something needs to be re-manufactured or the design changes? There's a lot of issues that go into it, and certainly looking at that forward looking approach of what are price gains or what are price changes going to be. I would say if you go back maybe 18 months to the beginning of the pandemic, the marks were very much up and down a lot more sporadically. Now quite frankly, I find them, with our team and data, a little bit easier to sort of predict in some aspects. That decision about do you pre-buy is now becoming more prevalent, and we are certainly seeing a lot of people pre-buy materials, particularly a lot of the heavy construction good, like the steel, things like that, for the large campuses that we're now seeing going forward.

I would say also, there is a risk associated with paying forward. Are companies going to still be around, quite frankly? Most companies - We've never had a problem with it over this last 18 months, but that is obviously a risk that's there. And then, the other thing that comes into this as well is the location about where you're getting those materials from, because we have things like tariffs are still out there. The movement of material and people in and around North America with Canada, Mexico.

I saw a recent article that truck drivers, or lorry drivers are sitting outside the port of L.A. eight hours waiting to get deliveries and things like that. There's a whole myriad of things that come in to it when you're looking at, do you pre-purchase and working out what that cost benefit analysis really is.

Barry Watson:Definitely. Along with the price fluctuality and such, changes in prices and such, we also have the supply chain disruptions. It's called bullwhip effect. And delivery times and such. Contractors are thinking - Have more and more lead times. And since pre-COVID days, those lead times in some instances are more than double. What have y'all seen or heard or recommend on how to communicate with your customers and clients with respect to those that volatility within the supply chain issue, that hopefully - We've heard from some others that the supply chain issue will hopefully be resolved in six to 12 months, but no one really knows that for sure. But what is your recommendation to your clients in this respect? Meloni, can we go back to you on that question?

Meloni Raney:Sure. I think touching to the earlier point too of transparency, making sure that you are documenting the - If you're a specialty contractor, you're documenting those conversations with your suppliers, and then you're passing that forward to the GCs. And then for the GCs, I think it is just having that conversation very early on. I know some of the contracts dictate some of those things, but the earlier you can get information in front of your owners to start discussing it, I think that helps your case.

The other thing is just anything that you can pull - TEXO issues a letter stating what's happening in the DFW market, and then we also have national information that comes from our national associations. Anything like that, that you can get more of that global perspective in front of the owner. I don't think anybody would deny the fact that we are going through supply chain issues. There's a mass rush for Christmas shopping already because of it. I think everybody is feeling it, but just getting some of that data in front of people of, if you want to go buy metal studs right now, you're 40 weeks out. That is just the lead time. And it doesn't matter which specialty contractor you use, it's going to be 40 weeks. I think getting that information in front of people as soon as possible, the owners, is really about your only defense of, this is where our market is at. This is what we're doing, so that they're aware as early as possible.

Barry Watson:Certainly. I can even speak personally. My wife has pre-bought Christmas already and I have the credit card statement to prove it. We're certainly no exception there. Make sure that those arrive in time. Daniel, do you have some thoughts on this subject?

Daniel Pomfrett:Yeah. Again, echoing what Meloni said, the open communication is really key. I think that continued communication as well, because we are seeing things change in a weekly, daily, monthly basis across the board. What we are seeing is that there are certainly waves of issues with the supply chains. At the start of the pandemic, it tended to focus on lumber, and a lot of that was driven by production facilities shutting down, starting up, shutting down, starting up, and so that's really effected things. The ability of the supply chains to react immediately is somewhat constrained by the processes that we use in construction. The example that I always like to use is that if you were to build a new lumber mill, for example, it takes about two years and over 100 million dollars, and so it is a process for those things to come back online.

What we are seeing, again, is those waves. With lumber, lumber went up, primarily from what we were seeing, due to the housing market and that being such a prevalent material in that industry, or that sector. And then that had some offsets that indirectly affected metal studs, as Meloni mentioned. And then, what we're now seeing is that, for example, timber is starting to come down, but plywood stays up. And so we're seeing these splits. Now the next rung on materials that we're going to see as we go in 2022 will be anything that's really chemical related, so PVC, insulation, roof materials. That was primarily caused by winter storms in the southern states, and again, supplier issues of getting the materials from A to B. It's an ever-changing market, and certainly, that communication is really the key aspect of it.

One final point, I would say that we are seeing a lot of clients now, contractors, subcontractors, the whole industry in general, are looking a lot further ahead now and actually planning with the critical paths and understanding what the cause and effect of those issues could be and building that into the schedules and the approach to the construction of the project as well.

Barry Watson:Have you seen any construction with your clients, any construction projects being placed on hold by owners and developers due to the current fluctuation of this environment?

Meloni Raney:I'll jump in here. Definitely. I don't think that's the majority now. I think it was several months ago. Probably closer to a year. I think putting them on hold was a common trend that a lot of owners were doing. I don't hear that so much anymore. I actually hear here in DFW that a lot of projects are kicking off that have been pushed, and so that's nice to hear. I do think you have your one offs that are going to - That it's going to happen, but to some of Daniel's point, the steel production - There are certain things that sometimes you just can't control, if you don't have steel, that's going to put your project - That's going to delay your project, especially in this market here when we're so busy.

Barry Watson:Definitely. How about you, Daniel? Any of your clients - Have you seen this happening with your clients?

Daniel Pomfrett:We have, and the effect has been very different across the different sectors. Obviously, the hospitality, leisure industry saw an immediate stop. Other sectors, for example, the housing, we just saw sort of continuing. And in some cases, actually increasing. A lot of that was driven by low interest rates and people working from home and things like that. Healthcare, we saw a lot of elective surgeries starting to be paused, and so that dropped our revenue stream. And then also, the healthcare facility redirected to pandemic projects. Preparing wards and things like that.

But I'd say in the main what we did see is that a lot of clients taking projects up to a certain point so that they could reengage them and hold for the right time in the market. What we are seeing now is a lot of those markets are actually now moving forward, and those projects that were paused during 2020 and '21 and are now starting to come to the forefront and starting to join that backlog of 2022 projects. It's going to be interesting to see how that moves forward, back onto the previous question about supply and demand, as all these projects converge into one. Does that put further pressure on the supply chains, both in labor and materials? But overall, people remain generally positive. Even in the hospitality sector, people have looked at how they can take advantage of the current issues. For example, if they don't have as many guests in the hotel, then they can do some rebranding or renovations in a more efficient way. But obviously, then it relies on the revenue stream. It's been very by the sector, but I wouldn't say - We've seen very, very few projects canceled or just placed on hold and waiting for the right time.

Barry Watson:Excellent. Being also in Dallas, we haven't seen - Those are more one offs than the normal, and so it's good to see that everyone's continued to push those forward. But we've talked about increasing prices and such. How do you see that contractors can best protect their firm in this area? Some are maybe allowed to pass through these costs to the owners, and some contract language doesn't allow this. What have you been, Daniel, advising your clients in this area?

Daniel Pomfrett:Again, it's that open communication. When you look at any contract, there's an apportionment of risk, and so understanding where that risk lies, who takes responsibility for that risk, that's really the key part. Ultimately, the project will move forward and be a success collectively. No individual is going to win, so to speak, on the project. You've got to look at it as collectively as a team moving forward. That's certainly what we advise our clients, is you got to go into it together. Very open, very transparent. Understand the risk - Ultimately, the risk on a project is the risk on a project. It's how that gets apportioned and who's taking ownership of it. And then also, importantly, understanding how to mitigate those risks as well, because risks will occur and issues will occur, but it's how you mitigate those and get past those collectively as a group is really the key. That's how we're advising our clients moving forward on that team approach.

Barry Watson:Definitely. As Meloni alluded to earlier, or you both did, open communication, certainly. Meloni, any other additional thoughts on this topic?

Meloni Raney:I agree with all that. The conversations that I have with people are probably more operationally based and how they're running their companies. I would say that this pressure of everything in this world right now has created the demand for innovation. People are becoming a lot more innovating, as Daniel stated, with the way they collaborate with their teams. They're figuring out ways to use their data internally to how to become more efficient as a company. I think it has pushed us - Things like this push you to become lean, just because there's a ton of unknowns out there. I think companies are looking for those ways to become more efficient and operate in a way where you can help mitigate some of the unknown risk that you're taking on with these projects.

Barry Watson:Certainly be innovative is a key factor in continuing success. Moving onto that is what sort of new key technologies do you feel that you're seeing that contractors are adopting or should adopt in the current environment to remain competitive? Is there a lot of software, hardware, artificial intelligence that you're seeing, and what do you think will be prevalent in the coming years? Daniel, you want to take the first shot at that one?

Daniel Pomfrett:Yeah. I think the industry in particular in the last - From what I've seen personally over the last three or four years has been pushing technology. We saw a lot of it with BIM modeling and those kind of aspects coming into the industry. We've seen very much a prevalence and increase in prefabrication. Modular construction as well. That's now becoming - I wouldn't say it's mainstream yet, but it's certainly becoming more prevalent across the markets. We continuously have conversations with clients about that modularization, which that also helps in terms of labor aspect, in terms of controlled environments, and that kind of thing as well.

We have seen things like virtual reality coming in now, particularly on the design side, where people want to walk the building, so to speak, and see and feel how it works. I've seen those kind of things. In terms of on the project management and estimating side, the softwares, there are new softwares out there. I would say that people are very much now data-driven, and we're seeing that now in terms of people want to see what's happening historically, but then also what the projections look like, and that constant monitoring. I'd say the biggest uptick we've seen is in that data collection and data analyzing.

We've seen, really, over the last 18 months or so, the industry has adapted really well to remote working. A lot of the clients that I speak to, contractors and owners and architects and design teams, it's been a challenge and it's not been without its issues, but when you look as a whole, the industry's adapted really well to that collaborative work. I think one of the challenges we've seen is that the - It's more the newer people to the industry or to firms and getting them integrated and trained and things like that. That's where we've seen some of the biggest challenge, I'd say, in the collaboration of - There's nothing quite like - I guess I'm a little bit old school in it, but there's nothing like sitting in a room together and being able to connect with people and read people's body language and talk through issues and get a drawing out and look at it on a piece of paper.

But overall, I think the industry has really adapted very well. Like I say, the BIM modeling, the virtual reality, all those things are going to certainly increase as we move forward over the coming years.

Barry Watson:Yes, certainly. We're in the new tomorrow with what we're taking - Learning from COVID and taking and applying it to the present day and using those new technologies to be able to do that. Meloni, what have you seen on your side being with TEXO and all your clients?

Meloni Raney:I agree with everything Daniel said. I think 10 years ago construction would not have been known as an innovating industry. I think we just - The way that we built was the same way that we built 200 years ago. Yes, there were some efficiencies, but for the most part, it really hadn't changed. I think in the last 10 years we have just seen an explosion of innovation and technology usage. I think half of that goes with the labor shortage, of in order for us to bring in a younger generation who plays video games and they're very electronically focused, we've had to change as an industry the way that we recruit them and then the way that we work.

It's just kind of mind blowing when you hear some of this technology of being able to operate a crane from a remote control, sitting down on the ground, or for a demolition contractor to use a robot to go in and place explosive versus sending in a human. I was chatting with a specialty concrete company yesterday and they've purchased a drone that will carry five pounds of curing compound and will spray, based off of the BIM model, where it needs to. Using technology like that is phenomenal. It's helping us with the labor shortage, but then it's also becoming more efficient. If that drone can drop this curing compound based off of the model, the waste amount goes down and we just become more efficient, and then it's helping us to hopefully draw in a younger generation that would want to use some of these. I think there's a ton of trade specific innovations that are out there.

Daniel mentioned a whole lot of wide aspects with estimating tools and all sorts of software that's out there to help us as an industry. Right now we need it all, honestly. I know Dallas Fort Worth is the second largest construction market in the country, and so in order to keep up with that fast-paced demand, we need all the help we can get.

Barry Watson:Certainly. Those are some amazing facts and stories that you have there, so I think that's awesome in how they're using the drones to do those tasks and other technologies to help with the labor shortage that we're all still continuing to face.

Regarding that, it seems like it's always been an issue, but do you see some trends coming into 2022 for the labor shortage, and can you speak to the work that you're seeing being done to address that with your members and your clients, and how are they facing it, and do you see any success there? How about Meloni, you want to take that first?

Meloni Raney:Sure. For the state of Texas we have a labor shortage, a craft professional shortage of about 800,000 people right now. I think our average plumber in the state is 55, which is an issue. That's how we build buildings. Construction doesn't control the economy, but construction builds the buildings that the economy is created in. Our industry is vital to the American story and to what America does. We have got to be recruiting as many people into the industry, and then also retaining the ones that we have. We can't lose them like we've done in the past.

There's a ton of efforts that are going on right now. Thankfully, back in 2013, the state of Texas passed House Bill 5, which forced schools to bring back the CTE programs. Now schools have to have a CTE program in high school, and the kids can choose in eighth grade whether they want to go a college route or they want to go a technical route and study something in CTE. Now our effort as an industry is to connect with those CTE programs so that when a student is studying construction in high school, they're connected with an industry professional so that they've got that umbrella, so that when they graduate from high school they know they can go to college and go that route and study construction, or they can go the craft professional route and go to a technical school and get that skill.

I think it's educating them. As an industry, we, historically, I don't think have done a good job of that. I think this has forced our hand in the last five to 10 years of you have to be out marketing your industry. We are phenomenal at building and solving problems technically, but when it comes to going out and selling our industry we've fallen short. We have to get out there as an industry and let this country know construction is an incredible career, and there's all sorts of paths to get into the industry. But I think it has just put this pressure of, we have got to do a better job of marketing our industry. And we are. It's taking some time to get there, but we're definitely doing a better job.

Barry Watson:Thank you for that. Daniel, you want to take that one?

Daniel Pomfrett:Yeah. Again, echoing Meloni's comments. I think it comes down to making - I don't want to say making it more attractive, but letting people know how attractive the industry is. What we are seeing, and we touched on with the technology, things have moved. Even if you look at our cellphones, for example, how they've moved over the last 10 years. Construction's got to compete with that kind of industry, the tech industry. By bringing in these new technologies, drones, all those kind of things we mentioned before, it makes it more appealing. I think historically - And I come from a - I'm a third generation contractor, so I've been around the dirty part of the job, shall we say, being on site and things like that. That was a view of it. It was, you're on site in the cold and it's hard labor and things like that, whereas the reality is it's not. Changing that perception of the industry is really where it is.

I would say, even to - What has actually helped at the moment is that over this pandemic period, in most places construction was listed as an essential industry. The market continued so people remained employed. We didn't see as much people movement or loss of people from the industry as we did, say, for example, in 2008, which was people's last data point of a recession. But what we have seen is that there are people that are still leaving industry. Those people that are the 10, 15, 20 year experienced people, they're very difficult to find across every location.

Getting back to that 2008 point as well, what we saw there was that the bounce back from 2008 for most sectors from that recession was probably about five to seven years. What we're seeing with this pandemic is that the bounce back is going to be somewhere between one to three years, depending upon, obviously which sector you're in.

In 2008, we had that four or five period where it was just not an attractive industry to come into and the industry had really slowed down. And then people started coming into the industry. But it takes four or five years to get the train in, and then you got to get the site, site experience, and so on and so forth. If you track that period from - I'm talking 13 years, but you got four or five years for people to actually get engaged, four or five years for people to actually get trained, and then went out, hit the pandemic recession, that's really affected things.

The pandemic has offered the respite to the issues with labor, but it certainly hasn't solved the issue. As Meloni mentioned, Texas is by no means unique in the fact of how many people it needs to be running at full tilt for construction, and that's just across the entire United States. Making that more attractive industry sales point, I guess, is really what is key. Again, I think that technology will really help. Even things like I mentioned, prefabrication. Prefabrication offers a controlled environment where you go into a very - I won't say sanitized, but a very unique environment. You're not standing in a trench somewhere, which again, is - Perception is different to the reality. But again, that sort of thing really appeals.

And education. We see it across the board, is that the amount of college degrees now as well are actually upcoming with construction technology, trade, such like, is in increasing day by day, and that's really going to help the industry as well.

Barry Watson:Excellent. I know with that - Few years we're still marketing for the millennial group and such and drawing from there with the specialty trades and such. But one thing that's - Environmental, social, and corporate governance policies and practices are becoming more and more prevalent and common among all industries. ESG investing is most likely approached by millennials, and that's according to a Morgan and Stanley bank study. Have you seen these ESG policies and programs being implemented in your construction clients, and are they having that positive effect that they're designed for? Meloni, I'll shoot that one over to you.

Meloni Raney:All right. I think you have to respond to it just because it's the world that we live in right now. It's just the current state of the environment. I think construction companies are having to respond. To what degree definitely varies. Some of our larger nationwide companies have a lot more resources and tools to implement programs that are nationwide. I think it's awesome and I love the DEI programs that are happening around the country. I do think that it is having a positive effect on our industry, because if you look at the construction industry, it's mainly males ages 24 to 55. That's the majority of who is in construction. That leaves a whole gender out of that equation.

I think putting programs in place, like kind of the previous question talked about, of you can be a female in this industry. You can be any ethnic background. It doesn't matter. This industry is open for business, and we're open to anybody who wants to be in it. I think getting that message out, of only 2.9% of people in construction are females in the technical side of it. How can we make sure that this industry is appealing to females and that we're getting the truth out there? To Daniel's point, there's a perception about construction. What these issues are bringing to place, or these policies are bringing to kind of making it known is you can be a female and be in construction. You can be a minority and be in construction. In fact, we welcome it and we're going to help promote your business.

I think it's brought some issues to light that we've needed to address. And then how companies are doing it is a wide gamut. I know here in Texas we have a lot of municipality and government work that is forcing the JVs and forcing the support of minority companies, which is great because you're showing these partnerships and you're helping pull companies along and supporting them. We've seen a positive effect in the last five plus years of having to respond to what's happening in this world. And hopefully it continues in a very positive way of supporting people, equipping them with the information and the foundation that they need to go have a successful company.

We've seen a ton of companies in this last year and a half pop up, so people are wanting to start their own companies. Now as an industry, how can we go support them and make sure that they're successful?

Barry Watson:Excellent. Thank you very much for that good insight, Meloni. Daniel, what have you seen with your clients?

Daniel Pomfrett:I guess there's several aspects to this. On the environmental and sustainability, that's obviously, front and center of a lot of people's thoughts, typically now with various government conferences going on and targets being set for sustainability goals and things like that as well. The industry has started to adapt and continues to adapt. We've seen laws coming, for example, in New York looking at sustainability and particularly commissioning and the operation of buildings. We're expecting those to be replicated across many of the other states in the coming months and years as well.

Energy usage is a big thing for the industry, both directly and indirectly. When you take the inception of a product from initial of getting the material from whatever source it is, then manufacturing, then shipping - When you look at the whole energy side of the industry, there is a lot of work that can be done and people are certainly focusing on.

I would say also that we are seeing a cultural shift. You mentioned millennials and we mentioned that, getting people into the industry, someone who started work maybe 20, 30 years ago has a different life goal or approach or viewpoints to a lot of different things. A lot of people now are looking at how can they join an industry that's sustainable, for example. How can they join an industry that's more inclusive? We've even seen now that with the industry, is that we're able to open up not just to race, ethnicity, and the other area as well, but also people from different educational backgrounds as well. You don't have to have trained in construction, for example, to be able to come into construction. We see that a lot now where people are - I won't say changing careers or anything like that, but we're opening up the viewpoint of people's experiences and how they can utilize that in construction.

Daniel Pomfrett:We've talked about technology, for example. If you can design the drones and fly them and all that kind of stuff with the technology as well, there's a big role to play in the construction industry.

We do see, particularly in a lot of locations now, the focus on minority, woman-owned businesses. Those percentages that are set by, particularly in the public work, have started to increase. But we're also now starting to see that private clients are actually starting to do the same as well. They're bringing those guidelines into their projects as well.

We're seeing other different changes in methodology, for example, to align with the governances. Like lean construction, for example. Just in time delivery. Those kind of practices that, again, have been in and around the industry for a while now, but have now started to become more prevalent and move forward. I think there's going to be a lot of changes as we move forward over the next few years, certainly, particularly with the folks on sustainability energy usage and fossil fuels and all that kind of thing as well. It's going to be an interesting time. And the industry, quite rightly, is and needs to adapt to those governances.

Barry Watson:We certainly live in exciting times and 2022 is going to be an exciting year. As we close up this section, what are you most excited for about going into 2022, as we wrap up this year, in the construction side, and what are you seeing and what is really motivating y'all to be on the outlook going forward, if there's anything you wanted to add?

Meloni Raney:I'll jump in here. I absolutely love construction. I do think that it's the best industry that's out there, so I'm probably a little biased, but I think that you can always come out of a situation and you either come out worse, you come out the same, or you come out better. I think that construction is 100% coming out of COVID better. I think it's forcing us to be innovative. I think staying essential is something that was a boost behind knowing that what we do is critical to the backbone of America. I think that it gave us that renewed energy of bringing people into our industry, so I think it's going to be a push behind us for this labor shortage to help us go solve that.

But I think what excites me most is the realization that people who are in construction, we have to retain them. In order to change this world, we have to impact lives positively. We have to invest in our people. We have to train them. We have a younger generation that's coming into our industry that is demanding training from companies, and so it's shining a spotlight on that for our industry. Yes, you have to be technically sound. That's just a given. But the emphasis has been on the professional skills, and those are now called essential skills. You have to have them.

To me, that's what exciting, is that our industry is realizing that there's more to life and we have to support that, and we have to help people with their work life integration. We have to support them in getting these essential skills. I've seen a more balanced approach to construction, which makes me happy because I think that's how we're investing in our people, and that's how we're going to change lives and ultimately change the world as an industry. I'm really excited. I know it's been a really tough few years and there's a lot of hard stories coming out of it. But if there's one thing construction is, it's positive and we're problem solvers, so we're going to figure out how to take this and turn it for the good and use it to make us a better industry.

Barry Watson:Yes. That's one of the great things I love about contractors is going out there and see how they solve. That's what they do. They solve problems. They go around that. They simplify the issue and get through it, so I'm excited looking forward into 2022.

Daniel, can I turn this over to you, your thoughts and insights?

Daniel Pomfrett:Yeah. Same as Meloni, I'm a construction person through and through. I don't think there's anything else I'd rather be doing, quite frankly, so I will be extremely biased in this. But I just love the problem solving. Not everything is easy to do. Not everything is simple to fix, and the way the industry has adapted and developed to the pandemic, and the approach and the possibilities of what could happen moving forward. With the new technologies, the new people coming into the new experiences, there is so much more that could be done and will be done, stuff that I can't even probably think of, quite frankly, that will come out and move the industry forward. There are so many possibilities.

I think what's really exciting to me, I love data as well, as you can probably see also. Just the whole data-driven part of it and understanding the markets and understanding what that data is giving us. But the ability to analyze it as well and collectively move forward as an industry. And then the final part is sustainability, and the environment is really one of the key things that I'm really looking forward to, just seeing how - I know the industry will react and will make large, big strides into things like carbon footprints and things like that as well, so it's an exciting time up there ahead.

 I think in 2022, particularly, we're going to see a super charged of all the issues, really, coming out the back of the pandemic, because we have all this sort of pent up - I don't want to say pent up demand, but pent-up thoughts and processes and new ideas that are going to come to the forefront. I think '22 is going to be very much an exciting year for the industry.

Barry Watson:Meloni and Daniel, thank you both so much for your time today and your reflections regarding the discussions we had. I also want to thank our listening audience attending today, and hopefully you left with some helpful insights as we head into 2022. Bella, I'm going to turn the presentation over to you. Thank you.

 

About Barry Watson

Barry Watson is Director in the Audit and Assurance Services Group, with over 20 years of audit and accounting experience.