By Doug Coffey, PE, President
As 2018 is nearing a close and the holidays approach, it is a good time to reflect back and make note of some of this year’s highlights in the design and construction business, as well as for HAWA Incorporated. To begin, we are truly grateful for the companies, schools, universities, medical facilities and other institutions that continue to grow, remodel and perform infrastructure upgrades to their buildings. As engineers in the design and construction industry, the core of our business is to help our clients upgrade their facilities in a strategic and cost-efficient manner – and for us at HAWA, our focus continues to be on the mechanical and electrical systems. We are thankful for the robust economy throughout 2018 that had many institutions moving forward with projects.
Based on our observations, 2018 was a good year in the design and construction business. Admittedly, our view is not only influenced by the projects we are involved with, but also the Midwest region of the country where the majority of our projects are located. We are fortunate to have had a good workload throughout the year across multiple markets, including the construction and expansion of NICUs and children’s healthcare centers, the modernization and renovation of educational facilities, and other interesting and fulfilling projects. We have also seen a very active market with respect to Requests for Proposal/Qualifications. This indicates that construction will not be slowing down in the immediate future and design firms will continue to be challenged to deliver additional projects while current backlog remains high. A higher than usual number of private corporation projects would seem to coincide with the strong economy.
Conversations we have with other architectural and engineering firms almost always include discussions on the challenges associated with finding experienced staff. This has been the theme for several years now and continued in 2018. Most discussions include theories that the severe economic downturn that began in 2007 created a void of young professionals entering the workforce at that time, resulting in what is currently a very small pool of architects and engineers with 7-10 years of experience. At HAWA, however, we have seen an excellent response from young engineers to our job postings and hired several recently graduated engineers during the past year. This younger generation really embraces the technology used in the industry, such as 3-dimensional modeling, and the newest additions to HAWA’s team constantly remind us of the value of a multigenerational workforce.
Finally, one definite trend in 2018 was the continuing escalation of construction costs. Construction bids received on our projects have sometimes been well above estimates. We understand from the contractors that their material costs are rising (in some cases significantly) and labor is tight, which provides upward pressure on the cost of construction. The minimal number of bids received on many projects is an indication that the contractors are busy and don’t need – or cannot perform – additional work. This escalation in costs adds challenges towards bringing projects within budget. New project budgets being established must include current escalation rates or the design team will be challenged to meet the project requirements within the project budget.
Through all the ups and downs and trends of the industry, HAWA continues to flourish thanks to our hard-working staff, partners and clients. As we enter our 65th year in business, our dedication to quality engineering services has not changed. We wish you the very best during the upcoming holidays and look forward to meeting your mechanical and electrical engineering needs in 2019.