CEO’S MESSAGE
An AGC Member – Your Competitive Edge
At our most recent AGC of California State
Board of Directors meeting in January, we heard from several speakers who provided concentrated forecasts on the economic condi- tions for the California construction industry in the coming year. Ken Simonson, Chief Economist for AGC
Tom Holsman CEO, AGC of California
We are very
fortunate to have the best service, suppliers and specialty contractors supporting our construction industry as members of AGC. It made perfect sense to originally adopt the phrase, “It’s good business to do business with an AGC member,” and to keep it a central theme of our membership.
of America, spoke on the broad economic con- ditions in the nation and specifically, in Cali- fornia. He illuminated multiple market sectors where we have seen an incline. While these inclines, particularly in the multifamily and commercial hotel markets, are encouraging, we continue to see a decline in public sector construction. Although construction in gener- al is up due in large part to building construc- tion, the decrease in public sector construction is primarily driven by funding shortfalls which were anticipated before this year. At our Building Division meeting we heard
from Deborah Hysen from the California De- partment of Correction and Rehabilitations (CDCR), which is one public sector on the up- swing. She spoke of the increase in upcoming construction work for the CDCR in 2015/2016. The CDCR project sector principally benefits building contractors, and its bidding process is structured in a way which all sizes of contrac- tors can win work. On the other extreme of the construction
spectrum, we heard from Raymond Tritt, Cal- trans, at our Joint Engineering meeting. The report from him was sobering, to say the least. The lack of revenue for new highway and bridge building work is down significantly, driven in large part to the fact that the bonds sold to bol- ster infrastructure spending have been used for their stated purpose. In addition, gas tax rev- enue is down dramatically, due to more fuel ef- ficient vehicles and exacerbated by the signifi- cant decline in the price per gallon of gas.
Transportation funding is a significant
focus of AGC at the national and state levels, with our lobbyists looking intently at every possible option that is politically available to drive greater investments by our federal and state government for infrastructure. While the above information may be slight-
ly old news, it is important to recognize that from these market ebbs and flows, opportu- nities will arise. Contractors have taken this information and looked at new market struc- tures and have developed new skills to be com- petitive. Similarly, our Associate and Specialty Con-
tractor members have had to retool to stay competitive in the changing marketplaces in which they specialize. We are very fortunate to have the best service, suppliers and specialty contractors supporting our construction in- dustry as members of AGC. For that reason alone it made perfect sense to originally adopt the phrase, “it’s good business to do business with an AGC member” and to keep it a central theme of our membership. With the economic conditions always
changing, it’s comforting to know that at all levels, our AGC membership is always ready for change and to embrace the competitive na- ture of the industry. Knowing that our membership represents
the best of the best in the construction indus- try, it stands to reason that supporting and using an AGC member to maintain your com- petitive edge is just good business.
Tom Holsman
4 March/April 2015
California Constructor
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