MCAA Regional Report, Region F

Words: Al Slattery, David Masterson, Eddie Miller, Rob BarnesArkansas - Rob Barnes
Louisiana - Eddie Miller
Oklahoma - Al Slattery
Texas - Rob Barnes/David Masterson

Workforce Development

Arkansas

There are no active programs at this time.

Louisiana

There are no formal training programs, Union or non-Union, at this time. Immigration has also become a factor in finding qualified workers.

Oklahoma

Five masonry programs are still operating under the Career Tech guidance. The thing lacking in filling the programs is more industry involvement in recruiting and the promotion of all construction opportunities at the elementary and high school levels. The local union is operating their program with a handful of apprentices. Most masonry companies are now relying on in house training to be the common practice.

Texas

North Texas remains the only marketplace trying to mitigate issues that have to do with the need for skilled tradesman. General contractors and subcontractors are working together to develop industry standard practices for continuity across the market place in safety and general skill sets by respective trades with exception to the Masonry Trade. Un-employment had remained high for a substantial period and while demand is returning it is still unknown how many skilled workers left the field of construction. There is a general sense of frustration for masonry contractors in Texas for the lack of qualified personnel with significantly increased demand in the South and a slowly recovering marketplace in the North.

Economic Conditions/Forecasts

Arkansas

While conditions have improved over the past year, the lending standards still remain tight and the market will continue to be slow. At this time, the institutional sector is probably the only part of the market that will see much activity where they try to take advantage of a depressed economy and lower construction cost.

The Residential market has not recovered and the signs are remaining slow, and what development we are seeing at this time has been due to the threat of higher interest rates.

Louisiana

The state continues to remain very depressed. There is little or no private work at this time and the rebuilding along the Gulf Coast remains Federal Government driven and very difficult to deal with.

Oklahoma

Presently the work load in commercial and residential is being fueled by the energy sector with an ample amount of work for each type of contractor. The underlying problem goes back to the shortage of labor, both trained and untrained. The pipeline of work looks to be full for the next twelve to eighteen months.

Texas

Economic Conditions are improving. Home prices are stable single family has seen solid recovery in 2014; the high end single family remains strong, multifamily appears to be the one sector that is experiencing significant growth especially on the high end, commercial building has finally recovered to a similar level to 2007. Building remains strong in the institutional area of education which saw a modest increase, and healthcare saw a significant decline from the previous year.

Single Family: Single family is expected to continue to grow at a better than average pace throughout 2015, the high end segment of the marketplace should continue to gain momentum ahead of the impending price escalations of material and eventually labor, 2015 is projected to continue to see significant improvement to existing homes.

Multifamily: 2014 saw a modest increase in comparison to the previous year, 2015 is predicting continued modest growth and expects to hit its peak in prior to future slowdowns in 2016.

Commercial Building: Commercial starts significantly improved in 2014. Owners and developers are continuing to work in the area of renovation or remodel. This rose significantly in 2014 and is expected to see some levelling in the second half of 2015.

Institutional: Stable but very little growth in the K-12 segment, renovations of older schools and some new starts but it appears to have slowed. The public and private markets of higher education are beginning to level off and growth is slowing but remains stable. Local government seems to have slowed significantly and due to escalating costs and reduced revenues are being forced to cut rather than build.

Healthcare: Healthcare saw a decrease a 20% decrease in 2014 and is expected to see a modest recovery in 2015 and projects positive growth for the next 2 — 3 years. With the baby boomers beginning to hit retirement age the need for facilities continue to increase both in the public and private sectors.

Masonry Marketing Activities

Arkansas

None at this time.

Louisiana

None at this time.

Oklahoma

The marketing opportunities are not what they should be due to no organized effort by local contractors or suppliers. The ample supply of work opportunities leads to the feeling that we have “enough” and hence there is no urgency to organize. This lack of urgency coupled with the labor shortage leads to a short sightedness and seems to be the overall consensus.

Texas

The marketing for the State of Texas is done by the Texas Masonry Council which is dominated by the Material Suppliers. Their focus is and has been the work with school districts and all level of government agencies to develop masonry-friendly code requirements. TMC has had some success in that arena, but they have lost focus on helping the industry create better and more qualified contractors who can and will perform the work within the required Codes and Standards.

Competitors/Trends

Arkansas

Arkansas remains stable though somewhat depressed. Outside competition has begun looking at some large specialized projects. Barriers to entry however are high due to licensing requirements, local competitor’s ability to be more limber, and the inability for outside labor to draw from local worker base. Cost of construction in Arkansas is very competitive. Outside competition is finding it difficult to compete; they have many costs including distance, differential construction methods, and confidence of the local general contractors. Contractors have to remain vigilant and perform well to prevent outside competition from opportunity.

Louisiana

The quality of the masonry construction has suffered from the influence of outside contractors who were not qualified to perform the work. They came into this market and used the federal system to get work and perform with unqualified workers and with little regard for proper construction standards because of the push by the Feds to rebuild the Gulf Coast area.

We know also have General Contractors who have decided to self-perform the masonry section of a project and in doing so have lowered the quality of the masonry work and created a more difficult marketplace for the legitimate masonry contractors.

Oklahoma

The competitors are mostly fragmented with both in and out of state companies working on rebuilding workforces and equipment from the effects of the recession. The trends the masonry business has undertaken have made a drastic change in the state. The trend seems to be capitalizing on new methods and technology to keep up with the ever increasing compressing of scheduling plus the influx of General Contractors from all parts of the country to the Oklahoma market.

Texas

Competition remains very high. Margins have seen a slight recovery; but owners and designers seem willing to change materials to prevent escalation which has helped us lose market share and them keep costs down. Given the extreme economic conditions over the past 5 years throughout the country many outside competitors have tried to enter the Texas Market. As the market in Texas is a highly competitive low cost market it is difficult to penetrate. Most contractors trying to enter have realized that with the volatility in the marketplace in combination with local general contractor’s lack of willingness to gamble their own reputation on the ability of out of town competition to employ local personnel and build projects on time have proven ineffective. General contractors are also requiring more financial information on subcontractors to try and assess their risk at using weaker competitors. The southern sector of the state has continued to pick up significantly and companies are trying to desperately hold onto manpower as the need for workers in other sectors such as oil and gas that may offer higher paid jobs begin to erode the available workforce that appears stretched from the previous economic downturn. The lack of willingness of the federal government to address immigration is stripping the available manpower from companies who are trying to prepare to adhere to stricter regulation and oversight. This is combination with contractors willing to misreport labor is allowing those who cheat to win.

Safety Issues

Arkansas

No report at this time.

Louisiana

No report at this time.

Oklahoma

Safety is an area that has rapidly improved with the wide array of equipment and training available through local vendors and tools such as the MCAA.

Texas

The contractor base in Texas has a very high focus on Safety. Due to the overall size of the state Texas remains at the top of the Federal Governments watch list. OSHA continues to be more visible and more active in pursuing fines across many of the market segments.
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