64 minute read
Safety Tool Kit
SAFETY CONSIDERATIONS FOR 2023
By Tracey McLenon
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V.P. of Operations Construction Association of Michigan
MIOSHA Program-Related Fatalities As of mid-November, the Michigan Occupational Safety and Health Administration (MIOSHA) has reported a total of 40 construction-related deaths in 2022. There were 54 MIOSHA-related deaths in 2021. 2009 saw the lowest number with 24. Of the 39 fatalities, 10 have been attributed to a fall; 8 were caused by a motorized vehicle, such as a forklift, dump truck, or automobile; 8 were the result of being struck by falling material; 6 victims were crushed in equipment; 4 were linked to COVID; 2 related deaths were caused by the collapse of an excavation; 1 was classified as a homicide; and 1 was an electrical shock.
The combined 16 deaths that were caused by motor vehicles and falling material might require us to reconsider the effectiveness of our training in recent years. The CAMSafety Committee has had in-depth conversations about the reliance on virtual training and how that may translate to jobsite incidents. Safety professionals recognize that a 20-minute video and a 5-question quiz doesn’t meet the OSHA training requirements for operating a forklift or securing a load.
Adequate training is defined as “a combination of formal instruction (e.g., lecture, discussion, interactive computer learning, video tape, written material), practical training (demonstrations performed by the trainer and practical exercises performed by the trainee), and evaluation of the operator’s performance in the workplace.” While there are many factors to consider, including back-up alarms, site congestion, equipment maintenance, and signage, it’s critical that employers return to in-person, hands-on instruction, rather than relying on the convenience of web-based options.
National Emphasis Program: Heat-Related Illnesses The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) reports that between 2015 and 2019 environmental heat cases resulted in an average of 35 fatalities per year and an average of 2,700 cases with days away from work. However, the total number of heat-related fatalities may be underreported and improperly diagnosed. The cause of death is often listed as a heart attack when the actual cause or aggravating cause may have been exposure to a heat-related hazard.
Heat-related illnesses range from heat cramps to heat stroke, which can potentially lead to death. To educate employers about the dangers of heatrelated illness, the Occupational Health and Safety Administration issued a directive in April of 2022. The document “describes policies and procedures for implementing a National Emphasis Program (NEP) to identify and eliminate or reduce worker exposures to occupational
*Reported as of 11/17/2022
heat-related illnesses and injuries in general industry, construction, maritime, and agriculture. It targets specific industries expected to have the highest exposures to heat-related hazards and resulting illnesses and deaths.”
The OSHA-NIOSH Heat Safety Tool App is a resource for finding the forecasted and current heat index. The
App indicates the hazard levels using the heat index as: Caution less than 80°F HI, Warning 80°F to 94°F HI and danger at 95°F HI or higher. Recommendations include having water available to employees, providing shade, and developing an emergency response plan. As climate change continues to increase temperatures across the globe, adopting a policy for managing heat exposure is a best practice.
Conclusion Now is a great time to review your 2022 program achievements and make plans for the next calendar year. Take the time to consider the ways in which you will improve your continuing education program and prepare your team to tackle the challenge of climate change and the impact on environmental conditions for employees working outdoors year-round.
The CAMSafety Committee is comprised of 20-plus safety professionals representing all facets of the industry. Meetings are held on the second Monday of each month and include a free presentation by a guest speaker.
Join Us Take advantage of this valuable CAM member benefit – email us at safety@buildwithcam.com and ask to be added to our meeting notices.
Upcoming meetings:
1PM 01/09/2023 Presentation Topic - Crisis Management (virtual)
11AM 02/15/2023 Committee Meet & Greet (in person @ EXPO/Suburban Collection Showplace)
1PM 03/13/2023 Presentation Topic - Gas Detection Equipment (in person @ CAM)
1PM 04/10/2023 Presentation Topic - Overdose Prevention/Narcan (virtual) Resources:
MIOSHA Fatality Information
OSHA Heat Illness Prevention
OSHA-NIOSH Heat Safety Tool App
CAMTEC Safety Training
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The Construction Association of Michigan is proud to honor its member companies that are celebrating milestone anniversaries in 2022 and 2023. We are recognizing all companies celebrating anniversaries ending in “5” or “0” in either of these two years. In addition, companies that have achieved 25 years or more have provided us with company profiles and images to be featured in these pages. CAM offers its heartfelt congratulations to everyone, and best wishes for continued success.
The Roy Company 5th Anniversary in 2022 Braun Construction Group 15th Anniversary in 2023 Jacapps 15th Anniversary in 2023 Building Accessories Corporation 20th Anniversary in 2023
A.R. Brouwer Company 25th Anniversary in 2023
Steve Brouwer founded A.R. Brouwer Company in 1998 as a full-service commercial design/build, construction management, and general contracting firm that serves southeastern Michigan.
By offering custom construction solutions, the A.R. Brouwer team matches its services to the client’s specific project requirements. Whether it’s commercial, retail, industrial, manufacturing, R&D, medical, health care facilities, multifamily residential structures, renovation, or new construction, “the project will be done right by an experienced team of professionals dedicated to giving clients a successful project,” Brouwer said.
On February 1, 2023, A.R. Brouwer will celebrate 25 years of doing business and delivering quality buildings at a competitive price and with exceptional workmanship. Even if the client’s project is just an idea for a future investment or has already been designed, the professionals at A.R. Brouwer can customize their construction services to meet the individual client’s requirements. The firm will provide equal consideration for budget, schedule, and the building’s functionality and aesthetics.
Detroit Dismantling Corporation 25th Anniversary in 2022
Detroit Dismantling Corporation (DDC) celebrates its 25th anniversary as a leading commercial and industrial demolition company. DDC was founded in 1997 as a Detroit-Certified, Woman-Owned Business Enterprise and Detroit-Headquartered Business. Owners Nikki and Jeffrey Dore pride themselves on operating with the utmost integrity, safety, and ingenuity.
Detroit Dismantling ensures that every job is completed with the use of cuttingedge technology. The company’s use of robotics has elevated the health and safety of their employees, as well as project efficiency. DDC’s Concrete Cutting Division handles concrete cutting, breaking, and removal – all in a one-stop shop.
“Safety, Be a Part of It” is their company mantra, chosen due to their fervor to establish the safest work environment for their employees and subcontractors. DDC’s extensive health, safety, and training program helps their employees attain a variety of credentials, including the OSHA 30-Hour training course. These initiatives and the safety awareness of their employees have allowed DDC to achieve a company EMR of 0.66.
As Detroit Dismantling celebrates 25 years in the industry, they wish to congratulate their phenomenal employees who have been pivotal in achieving this exciting milestone. In the coming years, the entire company will continue their commitment to deliver, as they say, their “Expertise in the Art of Destruction” to all of their customers.
Environmental Maintenance Engineers, Inc. 25th Anniversary in 2022
Environmental Maintenance Engineering (EME) was incorporated in 1997 by Michael L. Kelly. Starting in the basement of his house with six employees, a selfstorage unit, and a service van, Mike was on his way to providing asbestos abatement services. In 1998, EME became one of the first licensed Lead Abatement Contractors in Michigan. Subsequently, mold remediation, universal waste, and pigeon debris services were added.
In 2002, EME moved to a 3,200-squarefoot leased commercial/warehouse in Livonia and quickly outgrew the space. Three years later, the company moved into their own 10,000-square-foot office warehouse building in Inkster, which is their current headquarters.
“Team EME is honored to have longterm relationships with our valued client base, including general contractors,
consultants, school districts, universities, the GSA, the Archdiocese, hospital systems, and insurance contractors. We have always felt that the best way to build a successful business is to take excellent care of your employees and service each client like they are your only client. Be honest, work hard, and give back to the community, and the rest will take care of itself.”
Ideal Contracting 25th Anniversary in 2023
Over a span of 25 years, Ideal Contracting has proudly served its clients by providing first-rate construction services across several different markets. Beginning in 1998, Frank Venegas, Chairman & CEO of Ideal Contracting, began scaling his business using the approach of putting customers first and building lasting relationships with his employees to create trust and loyalty.
In its first year of business, Ideal Contracting generated revenue of $5.8 million with a staff of just five people. Today, Ideal Contracting is an MMSDCcertified construction company employing over 500 construction professionals and skilled trades with revenues exceeding $400 million.
With their people and customers in mind, Ideal Contracting has built a sustainable and strategic pathway toward success by forging deep connections with the trades in southeastern Michigan to support their self-perform services, including steel erection, civil, concrete, and carpentry. Ideal’s involvement in national organizations such as IMPACT, coupled with experience in erecting projects outside of their region, has helped the company become the largest Minority Business Enterprise (MBE) employer of ironworkers in North America.
Currently, Ideal Contracting has a fastgrowing team with ongoing projects in several different geographical regions of the U.S. The company is proud to have been a reliable construction partner for the past 25 years and looks forward to building on its reputation.
Established in 1998 by two farm kids who started their careers in the glass industry, John Schneider Jr. and Scott Motz found a niche in aluminum commercial door hardware. In witnessing the industry grow and change over the past two decades, they have continued to keep up with the demands of an evolving industry and are dedicated to continually improving their company.
John and Scott share an active role in both sales and support of the business and hope to pass all of their knowledge on to future generations. A family-
focused environment and a strong work ethic continue to help Progressive Hardware Suppliers build a reputation for outstanding service and sound solutions. “We are truly grateful for the exceptional people that have trusted us with amazing opportunities and look forward to the future.”
Ace Cutting Equipment & Supply Inc. 30th Anniversary in 2023
Ace Cutting Equipment & Supply Inc.’s founder Ron Measel was operating out of the back of his truck in 1993 selling concrete diamond blades. Fast forward to 2022, a team of 24 operates a 24,000square-foot building in Novi, where the company is recognized as one of the largest concrete cutting, grinding, and coring suppliers of quality equipment and service in Michigan.
Online, Ace Cutting Equipment & Supply is a top concrete cutting company serving customers across the United States and beyond. The company’s team is made up of tenured concrete experts with more than 100 years of combined industry experience in construction, from commercial to residential.
Expansion at Ace Cutting Equipment & Supply has always been thoughtful and conscientious by design, according to Measel. His purpose in growing the company is to continue providing faultless solutions to customers tackling construction feats that require precision acuity.
Davenport Masonry & Restoration is proud to announce its 30th anniversary. When Ed Davenport started the company in 1993, he wanted to create a culture that respected everyone by providing its associates with solid leadership, great tools, and reliable equipment. He knew the benefit would be realized and understood the impact it would have on their business. “Our jobs ran more smoothly with less down time, which thrilled our customers, but also yielded significant benefit to our company’s efficiency.”
Ed and his management team established the principles that have led to the company’s success over the years. “We are guided by the values of honesty, trust, integrity, fairness, loyalty, passion, and hard work. We are dedicated to construction excellence and proof of this is shown by our outstanding reputation and ability to thrive in a highly competitive market.”
GD Top Notch Cleaning Service Inc. 30th Anniversary in 2022
Established in 1992, GD Top Notch Cleaning Service is a certified WomanOwned Business that has been providing exceptional quality construction cleanup for commercial properties for three decades and counting. The company primarily operates in the industrial and commercial sectors, and provides new construction cleaning, but “we are the most trusted source for all phases of cleaning.”
As a young woman, Gale Glickoff broke barriers by being one of the very few women in the construction trades. She endured many adversities but persevered through it all and always kept going. Even today, Gale, President and Founder of this successful company, continues to thrive
ace cutting
in the construction industry. Gale's background and talents include being a licensed builder and realtor, as well as an innovator of cleaning agents as a directto-customer (DTC) retailer.
“We are proud of this milestone accomplishment and forever grateful to the companies, general contractors, and builders throughout the construction industry who have trusted us with their projects. To all the general contractors, builders, and to everyone in the industry, we give a big heartfelt thank you!”
Kelley & Sons Trailers 30th Anniversary in 2022
Tim and Sue Kelley founded Kelley & Sons Trailers in 1992. Only four years later, a business that began in their backyard with the hope of selling a few trailers a month to supplement their income rapidly grew into a full-time enterprise. In 1996, having outgrown their backyard, the couple purchased eight acres to accommodate their stock of trailers.
Now in business for 30 years, Kelley & Sons Trailers has earned a reputation for quality and workmanship in both the commercial and residential markets. Over the years, the dealership’s success has been based on carrying high-quality products. The couple knows the key to a flourishing business firsthand: finding both products that sell and perform exceptionally well and manufacturers that act as true partners. In addition to trailer sales, the service department stays busy five days a week with preventive maintenance jobs and trailer repair. Kelley & Sons promotes the importance of trailer maintenance upon initial trailer purchase.
Kelley & Sons’ “claim to fame” is creating a family-friendly experience for customers when each person walks through the door. Two of their three sons work in the dealership and will continue to grow the business when Tim and Sue retire. “With eight grandchildren, the possibility of a third generation is there too!”
MWA Commercial Roofing Solutions 30th Anniversary in 2022
MWA is proud to celebrate 30 years of service in the state of Michigan. “We are recognized as the #1 commercial roofing products representative in the market.” MWA has grown its business to include fall protection equipment, waterproofing materials, concrete primers (enabling faster construction), and insulated metal wall/roof panels. Its portfolio of industry-leading products has also grown and expanded to offer a comprehensive line of solutions for its customers.
The MWA team contains a knowledge base of over 350 years of combined industry experience. They provide comprehensive technical solutions for commercial exterior roofing/waterproofing systems and fall protection todesign professionals, roofing contractors, andbuilding owners and also supports and works with almost 100 percent of all Michigan-based education, retail, development, health care, and industrial owners.
“MWA continues to be the recognized leader in our industry for customer service, expertise, and integrity. When you choose to partner with MWA, rest assured that we have a solution for you. Thank you to our customers, partners, and friends for the last 30 years of support — we are looking forward to the next 30 with you all!”
D.A. Alexander & Company, Inc. 45th Anniversary in 2023
For 44 years, David Alexander has been dedicated to building and strengthening his largest enterprise, D.A. Alexander &
Company, Inc. Early on, David developed a sharp eye for what was lacking in the landscape industry – a sturdy and reliable partner for land development, landscape construction, grounds maintenance and snow removal. David’s management style, coupled with his strong business sense, are the cornerstones from which the company continues to grow. His creative business ideas and strategically focused organization are at the core of the company’s strength, carrying the company into its 45th milestone year in 2023.
D.A. Alexander & Company clients range from single-family homeowners to commercial businesses to top level builders of major suburban development communities. Over time, the company’s staff and equipment level has increased. So, while some companies and their owners may be challenged with the grand scale of some projects, it is with ease that D.A. Alexander & Company, Inc. takes them on. “We pride ourselves in consistently providing unmatched quality in materials and workmanship. Our team of awardwinning designers and technicians work together towards the successful completion of each project,” David Alexander said, “we look forward to year 45 and a great future ahead.”
Eastern Engineering 50th Anniversary in 2022
“Our customers are some of the hardestworking people in our communities. We are proud to have helped the AEC and manufacturing industries to successfully plan, design, engineer, and build some of the best communities and cities in the country.”
Eastern Engineering is a family-owned company celebrating 50 years in business and continues to thrive and expand into new territories. The company’s newest location in Novi has an incredible showroom. Customers appreciate seeing the advantages of each printer and comparing features side by side.
Eastern Engineering is a Women’s Business Enterprise National Council (WBENC)-Certified WBE company. WBENC Certification for women-owned businesses is one of the most widely recognized and respected certifications in the nation.
Eastern Engineering provides sales, service, and supplies, along with a rental program for wide-format printers and office copiers. Known for printing CAD drawings and plans in color for the same price as black and white, each of its six locations provides scanning and largeformat color printing.
“Launch a project with eComm. It is a simple and easy software solution for your construction management needs. Thank you to all our customers for supporting us. We are truly grateful and appreciate everything you do each day.”
Western Mechanical Contractors began its first year of operation in 1983. Like many humble startups, founder and President James Mollicone launched the fledgling business with $1,000 in the bank and a used Dodge van. The timing was good as the country was starting to come out of a difficult recession.
During the 1980s, Western Mechanical began establishing itself with a solid base of repeat customers. The company joined CAM, the Mechanical Contractors Association of Detroit (currently MCA Detroit), and the Mechanical Contractors Association of America (MCAA). James served many terms in leadership positions for MCA Detroit, including as association president, chairman of the Industry Fund, association board member, and pension trustee. James credits much of Western Mechanical’s success to the knowledge and networking gained by serving in these capacities.
Western has completed many significant mechanical projects for William Beaumont Hospital’s Royal Oak and Troy campuses, as well as building renovations for Bedrock Detroit, including the Shinola Hotel and the Book Tower. Other prominent projects include the Westin Book Cadillac Hotel, Huntington Tower (Huntington Bank’s new Detroit headquarters), Ascension Health Providence Park Hospital, and more.
“As Western Mechanical Contractors celebrates its 40-year anniversary, the company continues to grow and remain strong with an experienced management and support team that will ensure Western’s continued success.” Butcher & Butcher Construction 45th Anniversary in 2022
Butcher & Butcher (B&B) Construction can trace its roots to a tiny basement office in Rochester. Forty-five years ago, brothers Joe and Pat worked in this cramped space, handling the company’s paperwork after a long day laboring in the field. Joe managed the young company’s finances while Pat prepared quotes and lined up more work.
Pressing on through long days and years of hard work, the brothers grew the business into what it is today — a diversified construction company with three locations across two states. B&B now employs over 150 men and women in two divisions – glass and roofing – with each division doing both commercial and high-end residential work, as well as
having dedicated service teams.
“From custom shower enclosures and luxury windows to copper standing seam or slate roofing masterpieces, the company’s residential work is always photo worthy.” B&B’s large-scale commercial projects — such as the Fontainbleau Hotel in Miami and the Detroit Athletic Club – are equally impressive.
While Pat and Joe are still very much involved, the extremely talented leaders of each division, along with Pat’s two oldest sons, Pat Jr. and Matt, are in place to shepherd the company through its second generation of “providing the finest workmanship in the industry.”
McDowell & Associates 45th Anniversary in 2023
George I Landry Inc. 50 Years in 2022 Reliance Building Company 50th Anniversary in 2022
Established in 1972 and now celebrating its 50th anniversary in 2022, Reliance Building Company is a general contracting firm with an experienced team of engineers, construction managers, and design builders. The company’s founder, Alfred “Al” Deptula, PE, had a strong background in the automotive industry and heavy civil contracting. After incorporation, Reliance’s first project – a comfort station in Kensington Metropark – remains in use to this day.
Under the leadership of current company President R. Lynn Natzic, PE, Reliance specializes in water and wastewater treatment projects, along with government projects at the municipal, state, and federal level. By leveraging its background in engineering, the Reliance team strives to make the building process seamless for both design professionals and their clients.
As another strong suit, Reliance is committed to maintaining a high level of safety on their jobsites. In fact, Reliance recently earned CAM’s Diamond Safety Award. “Reliance is proud to contribute to the modernization of local municipalities, and the company looks forward to bringing its expertise and experience to the next 50 years of construction in southeastern Michigan.”
Signal Restoration Services 50th Anniversary in 2022
Vulcraft Indiana 50th Anniversary in 2022
Vulcraft Indiana, a division of Nucor Corporation, celebrated 50 years of manufacturing with a company picnic at the plant located in St. Joe, Indiana. Nucor Vulcraft is North America’s largest producer of open web steel joists, joist girders, steel deck, and steel bar grating.
The Indiana facility is one of nine Vulcraft plants located throughout the U.S. and Canada. The Indiana plant opened on August 4, 1972. The facility expanded several times over the next 50 years, including adding a steel deck plant in 1978. In 1990, a super long-span line was constructed to begin a more advanced method of building joists and girders.
“Today Nucor Vulcraft is recognized as among the safest, lowest cost, and most productive steel product companies in the world. The company uses the most advanced technology available to design and manufacture its quality steel products.” Presently the Indiana plant employs 350 teammates.
Current and past teammates of Vulcraft were invited to the picnic to celebrate the milestone. Several Nucor dignitaries attended the celebration, including Vulcraft-Verco (North America) President Shannon Phillips and Nucor Executive Vice President John Hollatz, both of whom once served as Vulcraft Indiana’s general manager. Vulcraft’s current general manager is Joe Fronzaglio.
WM. R. Curtis Inc. 50th Anniversary in 2022 Anderson, Eckstein & Westrick, Inc. 55th Anniversary in 2023
Anderson, Eckstein & Westrick, Inc. (AEW) was founded in 1968 by Warren Anderson. He was joined by George Eckstein in 1970 and Bill Westrick in 1972. All three engineers were formerly employed by the Macomb County Department of Roads. Today, the firm employs 140 employees and maintains offices in Shelby Township, Roseville, and Livonia.
AEW provides civil engineering, architecture, geographic information systems (GIS), consulting, and surveying services to more than 30 municipal clients in addition to a number of valued institutional and private clients in southeastern Michigan.
“Following our company’s tradition of excellence established over five decades ago, our team consistently provides the quality professional services our VIP clients have learned to expect from our firm, and our team remains focused on developing and growing long-term relationships of the highest integrity.”
AEW’s pledge has always been to continue building on the fundamentals established by its founders. “Our partners, managers, and employees are dedicated to working together with the communities in which we live and work, and we continually strive to earn the trust, respect, and business of both new and long-term clients.”
McNish Group 55th Anniversary in 2023
Midwest Steel, Inc. 55th Anniversary in 2023
The firm leads by providingarchitecture, planning, interior design, and historic preservation services. Neumann/Smith is focused on designing with people in mind and strives to improve the daily lives of the individual user as well as the community.In the words of the late founder Kenneth Neumann, “All of these buildings enhance the communities in which they are located, in some cases creating the whole community itself.”
The Neumann/Smith team is filled with insatiable curiosity, uncompromising integrity,and expert skill. The firm continues to build on a history of design and technical excellence with a talented group of individuals. The firm continues to grow its reputation, having been recognized by the industry with over 200 awards, including the AIA Michigan Architecture Firm Award.
With locations in Southfield and downtown Detroit, Neumann/Smith not only supports its home state, but designs for communities across the country. “From renovating one of the nation’s premier shopping destinations in Beverly Hills, California, to addinganiconic 20story high-rise to the Detroit skyline, the team is proud of its growing impact and looks forward to the future of Neumann/Smith Architecture.”
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Progressive AE 60th Anniversary in 2022
From its modest beginnings in 1962 as a firm of four original engineering partners to a full-service architecture and engineering design and consulting firm with over 230 employees serving clients across the nation today, Progressive AE has enjoyed growth and prosperity through the years. “Such longevity is proof of dedicated, creative, and forward-thinking employees backed by exceptional clients and growing communities. It is an honor and privilege to work alongside our client partners to help advance their vision for the future, and collaboratively shape the places we live, work, and play.”
Progressive AE’s workforce is a unique blend of creative people who think strategically, and strategic people who work creatively. The firm is guided by a fundamental and forward-thinking philosophy that design drives performance. This philosophy, along with the company’s holistic and multidisciplinary approach, is applied across its project delivery, program delivery, design-build, infrastructure, and consulting business lines.
Progressive AE provides innovative, inclusive, and sustainable architectural and engineering services across major client markets, including civic, health and wellness, higher education, housing, industrial, infrastructure, retail, and workplace. “As an employee-owned company, our team brings an owner’s mindset to every engagement.” The firm has offices in Grand Rapids, Michigan, and Charlotte, North Carolina. Wally Kosorski & Co., Inc. 60th Anniversary in 2023
Wally Kosorski & Company was formed in 1963 by Wally Kosorski. The company seemed to hit the ground running! In the first week alone, its payroll had 15 carpenters. During the 1960s through the 1990s, Wally Kosorski & Co. employed an average of 30 to 50 union carpenters. The company’s peak was around 2006, with about 85 carpenters.
Wally hired his three sons-in-law to work for him. Currently David Eschner is President, and his son Jeremy Eschner (Wally's grandson) is responsible for the daily operations of the company, which is headquartered in Clinton Township.
The skilled tradesmen at Wally Kosorski & Co. have completed more than 2,700 projects, including many large, awardwinning jobs at Domino’s Farms, The Whitney Restaurant, Orchestra Hall, The Henry Ford, Bass Pro, Chrysler Technology, and The Daxton Hotel to name a few. The company has also completed work at hundreds of schools, churches, and retail stores.
Fontanesi & Kann Company 65th Anniversary in 2022
In 1957, John Fontanesi and George Kann, two engineers working for General Motors, saw a need for an engineering company that could support the mechanical contractors in the Detroit market. Their approach was to sell mechanical HVAC equipment and to bring value-added engineering services as part of the sale. While selling mechanical HVAC products was the business, customer satisfaction was always the primary focus and the core value that contributed to the company’s growth and sustainability.
In 1982, John’s son Joe joined the firm – and building on the successful enterprise started by his father – elevated the company into a market leader, utilizing diversification and reinvestment in new technologies, facilities, logistics, and delivery systems. In 1986, Fontanesi & Kann launched Architectural Building Components, an architectural products supply company serving general contractors, with Gerry Caratelli, a current CAM board member. In 2013, the company formed “Bio-Grid” clean room systems, a division that manufactures sterile ceiling systems for operating rooms, with over 700 systems throughout the United States.
In 2015, the company moved into their current location, a state-of-the-art, 48,000-square-foot facility in Ferndale, to better serve the need for expedited deliveries. Through development and acquisition, Fontanesi & Kann now provides a multitude of turnkey building solutions not only in HVAC equipment but also in building automation systems, union electrical contracting services, Architectural Building Components, and “Bio-Grid” clean room ceiling systems.
Now celebrating 65 years in business, Fontanesi & Kann, led by Joe Fontanesi, Mike Henneghan, and Jill LaFountain, is focused both on customer satisfaction and growing the business throughout the Midwest.
Gardiner C. Vose, Inc. 65th Anniversary in 2022
“Established in 1957, Gardiner C. Vose has grown from humble beginnings into one of the most well-respected specialty contractors in Michigan. Our company prides itself on our ability to balance professionalism and ethical business practices with the love of family.”
Gardiner Chandler Vose, the company’s founder, was a 1926 graduate of the U of M Architectural School. He harnessed his creative vision and packaged architectural specialty sales with integrity, know-how, and American ingenuity. Upon his retirement in the early 1960s, the company grew to new heights under the direction of his son-in-law, the late Richard K. Schwarz. Today, the company remains family-owned under the thirdgeneration direction of Gardiner’s grandson, Kurt Schwarz.
The Gardiner C. Vose warehouse and showroom is located in Bloomfield Hills. The company furnishes and installs architectural specialties, such as raised access flooring and data center containment solutions from TATE, vertically folding retractable walls from SKYFOLD, operable and accordion partitions from MODERNFOLD, stretched fabric acoustical systems from NOVAWALL, and demountable partitions from TRENDWAY. Its skilled union workforce also provides commercial carpentry services ranging from small buildouts to major floor renovations.
“In reaching this milestone anniversary in 2022, we are humbled and honored, and we wish to thank all of our devoted customers, valuable employees, trusted business partners, and dear friends. We are proud members of CAM, and we are especially proud to be members of Michigan’s exceptional commercial construction community.”
Colasanti 70th Anniversary in 2023
Founded in 1953 by Rocco Colasanti and his sons, Alfred and Angelo, the Colasanti Companies built a reputation as one of the leading concrete contractors in the United States. Over the last 70 years, Colasanti’s
services have evolved to include fullservice construction management, general contracting, and design/build, as well as signature self-perform work.
Headquartered in Michigan, Colasanti has worked not only on many of the most notable structures in the state, but also on projects across the country in a wide array of market sectors, including manufacturing, medical, historic renovation, casino, sports facilities, education, retail, parking structures, residential, hospitality, commercial, and high-rise projects.
“Through four generations of family management, our entire team is committed to maintaining our core values and principles of quality work, on-time completion, and cost effectiveness without compromising our integrity or professionalism. Our experienced staff, along with our state-of-the-art systems and innovative construction methods, have contributed to our success, both now and in the future as we look forward to continued growth in the coming years.” Douglas Steel Fabricating Corporation 70th Anniversary in 2022
In 1952, Douglas Reniger and Paul Gillett launched Douglas Steel in an 11,000square-foot plant in Lansing. In 1959, the construction of a new fabrication facility on the west side of Lansing was only the beginning of the company’s expansion. Within seven years, the new plant nearly doubled in size, creating more than 50,000 square feet of fabrication space. Douglas Steel quickly developed a reputation as an aggressive and innovative partner adept at developing solutions to many logistics, scheduling, and design problems.
As an AISC Certified Fabricator and AISC Advanced Certified Erector, Douglas Steel has earned the reputation of being an industry leader in the Michigan fabrication and erection industry, while maintaining an outstanding quality and safety record. Douglas Steel specializes in fabrication and erection of health care facilities, office buildings, civic arenas, industrial facilities, warehouses, power plants, and higher education facilities.
Some notable projects, either completed or in process, are UM Critical Inpatient Tower, Ann Arbor; Kettering University Learning Commons, Flint; Ingham County Justice Complex, Mason; MSU FCU East Lansing Office Building; Tyson Foods USDA Bakery, Warren; Wacker Chemical HQ Facility, Ann Arbor; MSU FRIB Facility; and MSU Broad College of Business.
Grunwell-Cashero Company 70th Anniversary in 2023
Since 1953, Grunwell-Cashero has been restoring, preserving, and maintaining some of the most prestigious structures across the Midwest. GrunwellCashero is built on three generations of strong leadership and experienced craft workers. Fidell Cashero laid a foundation for Grunwell-Cashero more than 70 years ago. Fidell’s son, Scott Cashero, built on the foundation and passed the legacy on to his daughter, Jelane Raycraft. Today, Jelane is committed to maintaining the family legacy and continuing the tradition of excellence set before her.
Grunwell-Cashero focuses on preserving masonry and all related building materials. Specially trained field crews ensure high-quality work per proper practice using modern techniques
and innovative solutions. All building envelope issues, from leaks to structural repairs, can be addressed. Specialty concrete and carpentry divisions expand the restoration offerings.
Since its inception, Grunwell-Cashero has been a Detroit-headquartered business. Offices in Cleveland and Toledo allow geographic flexibility throughout the Midwest. “No matter the size of the job, great pride is taken in delivering end-toend care. From the bid to the project and at completion, we treat our customers like family.”
McCarthy Construction Company was founded in 1952 by the late Ervin J. McCarthy.He started the residential concrete company while employed as a Detroit police officer. After working tirelessly 11 years on the midnight shift and pouring concrete during the day, he quit the police department and devoted all of his time to the business. The residential concrete business also grew to remodeling and home building.
After returning from the Navy in 1968, his son, Michael L. McCarthy, joined McCarthy Construction with his father. Michael took the company to a new level by expanding the concrete division to include commercial, municipal, and heavy industrial foundations, flatwork, and site concrete. The business also performed tenant and plant renovations, along with industrial buildings and land acquisitions. Now two of Michael’s children, Michael and Carrie, have joined the business; the thirdgeneration continues to grow the company and take it to the next level.
“McCarthy Construction as a partner with Helping Hands Touching Hearts continues its support in Zimbabwe and South Africa. Our partnership has help build an orphanage and STEM lab, along with drilling wells and feeding and clothing the poor.” Scaffolding Incorporated 70th Anniversary in 2022
For 70 years, Scaffolding Incorporated (SI) has been providing safe, efficient access solutions to the commercial and industrial construction industry. The company is a leader in scaffolding, shoring, swing stage, trash chutes, and design/safety.
During Scaffolding Incorporated’s 70year history, the company has provided access to most of Michigan’s notable buildings and projects. More than ever, customers rely on the SI team to navigate MIOSHA, difficult access situations, and complex shoring applications.
SI has been providing rental, sales, erection, delivery, safety consulting, and design for 70 years. Its rental customers have access to all the best equipment that the Scaffolding Incorporated crews use on the most difficult jobs.
Monroe Plumbing & Heating 75th Anniversary in 2023
PEA Group 75th Anniversary in 2022
PEA Group was founded as a civil engineering and land surveying firm in 1947 by the Walker Family in Detroit. Since then, the company has evolved into a multidisciplinary site design firm, working with clients across the country, offering civil engineering, land surveying, landscape architecture, geotechnical engineering, facility consulting, ecological consulting, and much more.
“While PEA Group continues to grow and evolve, we have not changed how we operate over these 75 years: with trust, transparency, and collaboration. We put our employees and clients first while keeping our eyes on the horizon, continuously pushing forward.”
“Working together, our team established several year-long initiatives to celebrate this milestone in our company’s history, including selecting 12 charities to receive $1,000 in donations, implementing a scholarship program for our interns, and providing employees with 12 months of prize opportunities.”
Farnell Equipment Company 85th Anniversary in 2022
In 1937, BF Farnell started his company renting church pews and tables to local parishes. Post World War II, BF Farnell Company quickly became a valuable supplier to Michigan schools and industrial researchers. Since then, the company has grown from $1 million to over $10 million in annual sales, while winning multiple awards designing and constructing for R&D companies and Life Science applications at Michigan’s largest universities.
In 2015, Farnell Equipment Company was officially handed off to its third generation and became a recognized WBE. Today, Teresa and Karen Farnell, granddaughters of the original founder of the company, carry on the tradition of excellent customer service and quality furnishings. “We provide design, engineering, procurement, project management and installation of the top casework and fume hood brands available in the laboratory furniture industry, as well as specialized equipment and finishes for unparalleled research environments. We have been Building the Future in Michigan since 1937.”
Broner Glove and Safety 90th Anniversary in 2023
It was 1933 when Harry Broner and his son Barney opened a supply stand at the Highland Park Ford assembly plant. Back then, workers earned $5 a day and had to purchase their own personal protective equipment (PPE). Harry and Barney provided safety gloves and aprons, along with candy and fruit, to keep the workforce safe and happy. As industry grew in Detroit, Broner Glove and Safety was established to provide PPE directly to businesses. The company moved to a storefront on Manchester and then to Linwood Avenue. After David Broner joined the business in 1962, the company’s growth called for a move to a larger distribution center in Ferndale, followed by a move to Troy, and then to its current location in Auburn Hills. Now in its fourth generation of family ownership, the company is led by Bob Broner and Stephanie Broner Miller. In line with the company’s motto, “Making a
Difference in Your Safety Program,” the Broner team strives to “make a difference” with each of its customer and supplier partners.
Broner is a member of the AD Safety Network (affiliated distributor), a nationwide network of independently owned safety distributors and has been ISO 9001:2015 (the worldwide standard for quality in distribution) registered since 1999.
“We thank our customers for their trust and loyalty that has enabled us to reach this proud milestone. With gratitude, we appreciate the opportunity to continually ‘make a difference’ in safety by helping our customers keep their employees safe every day.”
LaDuke Roofing and Sheet Metal 90th Anniversary in 2022
“Between the weather and you, since 1932” is the slogan of LaDuke Roofing and Sheet Metal located in Oak Park, Michigan. Founded by Phillip LaDuke, Sr. in 1932, LaDuke has specialized in commercial and industrial roofing and custom architectural sheet metal for 90 years.
With the finesse and personalized service of a family-owned-and-operated company, LaDuke is certified to install a wide variety of roof systems, including built-up roofing, modified bitumen, and single-ply roofing. The company’s sheet metal department is skilled in both fabrication and installation of custom architectural sheet metal, including metal trim, roofing, both insulated and noninsulated siding, and custom copper and stainless work, as well.
Roger LaDuke is currently at the helm, serving as LaDuke’s third-generation owner. “We’ve been blessed with the opportunity to continue our family’s service to the industry,” LaDuke said, “and with the help of our talented team members, we hope to carry on the tradition of pride, excellence, and dedication to the trade as our family has for so many years.”
Turner Brooks 90th Anniversary in 2023
Turner Brooks, founded in 1933 by Herb Turner and C.R. Brooks in Detroit, has grown from a residential flooring company into one of the largest commercial interior contractors in southeastern Michigan. Beyond its size, the company has a longstanding reputation for dependability and craftsmanship within the ceilings, drywall, carpentry, flooring, and exterior finishes divisions.
From the beginning, Turner Brooks has been built on a foundation of quality and integrity, along with the ability to form strong relationships within the community. Over the last 30-plus years, the company has been led by Robert Halik. During his tenure, Robert has continued to build upon Turner Brooks’ reputation and has expanded its industry recognition.
The company’s success has been a direct reflection of the passion and knowledge of its employees. “With more than 300 years of combined industry experience, Turner Brooks’ employees are the company’s greatest asset and the key to its continued growth.”
“Turner Brooks prides itself on the quality and craftsmanship that it delivers to every project, from interior renovations to highend custom builds. As Turner Brooks looks towards the future, the company is excited about new opportunities to continue to strengthen the community and grow with future generations.”
Goyette Mechanical Company 95th Anniversary in 2023
In 1928, Leo Goyette founded Goyette Heating, and operating from his home in Flint, he began installing central heating systems throughout Genesee County. The company rapidly grew and expanded the business from residential work to commercial and industrial installations.
Today, Leo’s grandson, Dominic Goyette, chairs a company that employs more than 500 people and self-performs plumbing, HVAC, process, and electrical disciplines throughout Michigan and the Midwest. In total, the company has revenue exceeding $150 million.
The Goyette Mechanical Service Division has 200 vehicles, over 250 employees, and performs plumbing, HVAC, and electrical service and maintenance for homes and businesses across eastern Michigan. The Goyette Mechanical Construction Division has 250 employees and performs commercial, institutional, and industrial work throughout the Midwest and eastern United States. Projects include food production, automotive manufacturing, higher education, tech services, warehousing, retail, and more.
“Goyette Mechanical is celebrating 95 years in 2023 and looks forward to our 100th year! GOTTA GET GOYETTE!”
R.L. Deppmann Company 95th Anniversary in 2022
The R.L. Deppmann Company (RLD) was founded by Raymond L. Deppmann in 1927 in Detroit. Raymond believed that RLD should be “more than just another supplier,” and this founding principle has guided the growing company to this day. R.L. Deppmann is a manufacturer’s representative in the hydronic, steam, and plumbing industries.
Ray Deppmann believed the company would succeed by helping customers make better decisions in the fledgling hydronic heating industry. He hired registered engineers, contractors, and wholesaler leaders to build a team of experts – unheard of at the time. The company grew quickly, and in 1929, became one of the very first Bell & Gossett representatives in the country.
Today, R.L. Deppmann has three locations in Michigan (Detroit, Grand Rapids, and Saginaw) as well as a branch in Cleveland, Ohio. As a 100% employeeowned company, RLD is a five-time winner of the Top Workplace Award by the Detroit Free Press, a testament to its culture of putting people first. Many of R.L. Deppmann’s sales representatives are graduate engineers, and all sales staff graduate from rigorous factory training programs. R.L. Deppmann’s core values of knowledge, responsiveness, and empowerment have propelled RLD to be the successful company it is today. “R.L. Deppmann Company continues the tradition started by Ray - living and practicing our core values each day. We are proud to make a difference in our customers’ lives, and we will continue to serve our industries with excellence and integrity for many years to come.”
Toebe Construction 100th Anniversary in 2022
In 1922, Walter A. Toebe founded Walter Toebe & Company, a small bridgebuilding firm based in Lansing. Walter Toebe was instrumental in the formation of the Michigan Road Builders Association (now Michigan Infrastructure & Transportation Association), and served as a longstanding member and contributor to the organization. In 1960, the company moved from Lansing to the city of Wixom when brothers Burton Stover and Richard Wells purchased interests in the business.
Stover and Wells shifted the company’s focus to the Detroit metropolitan area, where significant investments were being made in the area’s transportation infrastructure. The growing company was immediately successful in obtaining several Michigan Department of Transportation (MDOT) contracts in southeastern Michigan to construct major portions of some of the main thoroughfares into the city of Detroit.
Building on its rich history as a leading heavy civil contractor in Michigan, Toebe today specializes in the construction and rehabilitation of bridges and other concrete structures, as well as highproduction concrete paving and excavation. “Never shying away from a fast schedule or innovative construction method, and always adhering to the highest standards of quality, safety, and integrity, Toebe takes great pride in building some of the most complex and challenging projects in the state.”
Wolverine Stone Company 100th Anniversary in 2023
Wolverine Stone is celebrating 100 years of service and four generations as a family-owned-and-operated stone and tile installation and fabrication company serving commercial and residential clients nationwide. Wolverine opened in Detroit in 1923. From the 1920s to the 1960s, Benny Capp formed a talented team and worked diligently to develop strong relationships within the Detroit business community. Capp never anticipated the company would sustain a century of success. His arduous undertaking in the early years paid off. Today, Wolverine’s craftsmanship is featured in some of Detroit’s most iconic landmarks, including the Detroit Institute of Arts, and the Guardian, Penobscot, and Fisher Buildings, among many others throughout the region.
Ben Capp, Jr. and his brother Stanley succeeded their father as president in 1969. Together, they expanded the company’s capacity to secure largerscale commercial projects. Notable projects include Chrysler World Headquarters, Southfield Town Center Towers, and the Renaissance Center.
Ron Capp became President of Wolverine in 1992 and has overseen complex and monumental projects at the David Stott Building, MGM Grand Detroit, DTE Headquarters, Shinola Hotel, Book Tower, David Whitney Building, Ally Detroit Center, Michigan Central Station, and the airport’s McNamara Terminal & Westin Hotel to name a few.
VP of Operations, Matthew Bontomasi has been with Wolverine for 20 years. Bontomasi’s tireless dedication has yielded countless esteemed projects for the company. Ron’s sons, Alex and Tyler Capp, represent the fourth generation of family leadership at the company dedicated to ensuring another century of success.
Alberici Constructors, Inc. 105 years in 2023
In 1918, Alberici Constructors was founded in St. Louis, Missouri, by John Alberici, an Italian immigrant performing mainly building projects in the area. In the 1930s, Alberici would made its first equipment purchase, trading a horse and buggy for a truck. Later that decade, Alberici purchased its first crane.
In the 1950s, Alberici began working in the automotive market for Chrysler and General Motors, and in the decade that followed constructed some of the first U.S. interstate highways. In 1962, Alberici hired its first employee dedicated to safety and, as a result, reported a 35 percent decrease in accidents. To expand its work in the automotive market, Alberici opened an office in the Detroit area in the 1980s.
Today, Alberici is a diversified construction company recognized for superior quality and customer service with operations throughout North America. With annual revenues exceeding $2.5 billion, Alberici is ranked as the 35th largest construction company in the United States by Engineering News-Record. Alberici’s office in Southfield continues to serve automotive and industrial clients in Michigan and around the world.
Frank Rewold & Sons Inc. 105th Anniversary in 2023
Meadow Brook Hall is the historic home of one of the automotive aristocracy’s most remarkable women, Matilda Dodge Wilson. In 1918, Frank L. Rewold became her personal handyman. Over nearly 50 years, Frank’s work ethic, honesty, and dedication earned him the more important title of being Matilda’s right-hand man. By his side during decades of building, fixing, and problem solving, Frank taught his young apprentice and son, Roy Rewold, the tools of the trade. Roy later completed the construction of Sunset Terrace, a retirement home and guesthouse for Matilda. In 1957, the Wilsons donated the 1,500-acre estate and founded Oakland University. Frank Rewold and Son was incorporated in 1962.
Frank Rewold’s carpentry and relationship skills foreshadowed his company’s future. “The company’s legacy was built by hand and guaranteed by a handshake.” From Rochester, Michigan, Roy and his son, Frank, continued building the reputation of Frank Rewold and Son. The company continually performs construction services for local institutions, communities, businesses, and organizations throughout southeastern Michigan.
Though capable of building on a large scale, Roy Rewold often stated that Frank Rewold and Son never intended to be one of the largest general contractors — only one of the best. The four-generation, familyowned business believes in building community. Each year, the Frank Rewold and Son Foundation donates thousands and supports numerous client causes and local charity efforts.
“Today, 105 years later, we have retained an honest,personal, and professional team approach. Third-generation and current President /CEO, Frank H. Rewold, leads the company. His sons, Jason and Sean, are helping guide Frank Rewold & Sons (FRS) into the next century.”
RAM Construction Services 105 years in 2023
In 1973, Robert A. Mazur, a registered architect, husband, and father of four, purchased 50 percent of the Detroit
division of Western Waterproofing, a company established in 1918. Robert passed away suddenly in 1977, and his wife Evelyn stepped in to lead the family business. In 1980, their eldest son, Bob, joined the family business full time at age 21. Soon after, the remaining 50 percent was purchased by the family. The company paid homage to its founder, Robert A. Mazur, in 2008 by officially rebranding Western Waterproofing as RAM Construction Services.
The company had 17 employees when Bob was named president of the firm in 1983. Under his leadership, the company now employs more than 650 people and operates five offices in two states. RAM is the largest Midwestern contractor specializing in the restoration of aging structures and skilled waterproofing. The company, headquartered in Livonia, completes more than 2,500 projects annually across the Midwest. RAM has played a large role in transforming the skyline of Detroit, helping to revitalize these iconic Detroit buildings – and literal “pillars” of the community – to their original stature.
“Built on integrity, RAM Construction provides quality work and maintains a safe work environment. The company’s quest for continuous improvement, along with diversifying the product line, has helped RAM successfully navigate the many economic downturns over the years. With forward thinking, RAM Construction Services will continue to drive endless possibilities and evolve within the industry.”
AUCH Construction 115th Anniversary in 2023
AUCH Construction was founded in Detroit in 1908 by George W. Auch, a former schoolteacher who first built schools, churches, and homes in his German-American community. Over the last 115 years, AUCH has grown steadily, becoming one of the top 10 construction management firms in the area for several decades. Focusing on southeastern Michigan, AUCH has built a full portfolio of educational, health care, municipal, commercial, and religious projects.
Much has changed at the company over the decades, including the transition from family-ownership to employeeownership, embracing new technologies while maintaining the tried-and-true methods of the craft, and more recently, constructing a new LEED Gold-certified headquarters at the east gateway to downtown Pontiac. “Key to AUCH’s longevity is maintaining George’s upstanding business ethic, exceptional customer service leading to repeat clients, and active involvement in the community.”
Through all of its many years of success, AUCH’s employees continue to be its greatest asset, confirmed by
receiving a Detroit Free Press Top Workplace award for nine consecutive years.
When asked about the future, AUCH President Jeff Hamilton says, “As we celebrate our 115th year, we have positioned ourselves for another century of construction excellence.”
Spence Brothers 130th Anniversary in 2023
Spence Brothers is a family-led construction management firm with an historic legacy that began in 1893. In response to Saginaw’s Great Fire, which destroyed most of the homes on the city’s east side, brothers Matt and Hugh Spence launched a start-up construction company named “Hugh Spence & Brother.” In 1910, the company’s name was changed to Spence Brothers and entered into general contracting in earnest, building landmark churches across Michigan. The company's most ambitious project of the period was the City Hall in Flint.
Throughout the 1920s, the growth of the company was moderate, yet steady. During this period, the firm built Saginaw's North and South Intermediate Schools - the largest projects of the era. Spence Brothers survived the Great Depression by building post offices across the United States. The decades forward saw the construction of large projects on U of M’s campus and continued municipal and utilities projects throughout the state. The company’s Traverse City office opened in 1999 and followed that with an Ann Arbor office about a decade later.
In 2010, Herbert A. Spence Jr., Edwin A. Spence Jr., and Matthew J. Spence III were inducted into the Michigan Construction Hall of Fame, recognizing their key leadership to Spence Brothers and their contribution to the Michigan construction industry. Today, the company continues to thrive in building projects throughout all of Michigan, including the Upper Peninsula. Significant projects recently include Lake Superior State University – CFRE, a freshwater research facility; Memorial Healthcare’s neurology, orthopedic, and rehabilitation facility; and Interlochen’s new Music Center.
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2023 Michigan Construction Outlook
Building Backlog Insulates Major Recession Effects but Future Remains Murky
By Dennis Burck
All indicators point toward a recession. The yield curve is inverted, stocks are in a bear market, and the delicate dance between the unwelcome partners of runaway inflation and rising interest rates has the construction industry and economists in suspense, watching for a misstep.
Despite the warning signs, Plante Moran Chief Investment Officer Jim Baird said that predicting the start of a recession is difficult to pinpoint. “The question of ‘When does it arrive?’ is a tough one. Given that the yield curve is inverted, it shows us that there is a high probability that in the next six to 18 months, we will be there,” he said. “That could put the economy into recession as soon as early 2023, although many economists are pointing to the latter half of the year as more likely.”
President of Birmingham-based Calderone Advisory Group Alexander Calderone said he agrees with Baird that it’s likely that market conditions will be defined as a recession in 2023. “But if we do see this potential mild recession in mid-2023, I wouldn’t expect that to be felt until probably at least 2025 in the construction industry,” Calderone said. “That’s because if you go out and query contractors in the state, everyone has a backlog right now.” That backlog is expected to last for the next couple of years.
Founded in 2014, The Calderone Advisory Group advises construction firms and other businesses on transactions, financial decisions, and paths forward during difficult times. The organization has provided financial advisory, cash flow forecasting, and turnaround management services to construction and engineering firms operating in the alternative energy (wind farm), general contracting, HVAC, mechanical, oil and gas, audio/visual, precast, mill working, and paint finishing system sectors.
“When we think of how the impending recession will impact Michigan's contractors, we have to consider the fact that there is this lag due to construction being an end-cycle industry,” Calderone said. “If you think of where we are at right now, we are coming off years of easily accessible and inexpensive financing. We are coming off tremendous amounts of injections of capital into the economy.” Pent-up demand, especially in states like Michigan with harsher lockdowns, also comes into play, he added.
The latest AIA Consensus Forecast shows predicted growth throughout 2023, albeit at a slower rate. In total, nonresidential construction is forecasted to increase by 6%.1 Divided by construction types, the forecast sees hotel construction as the pack leader with a 13.8% forecasted increase, while industrial construction is runner-up with a 9.9% increase. The only construction type forecast to shrink for 2023 is the new construction of religious facilities at -1.1%.
Calderone explained that the 13.8% forecast in hotel construction is likely a sugar buzz due to pent-up demand. “Business travel came to a screeching halt in 2020, and even midway into 2021. It is starting to come back now, and we
are seeing postponed projects work their way through the system.”
Conversely, Calderone said that industrial construction is here to stay. “I think that is reasonable, and here to stay going into the next five years.”
But evidence of a downturn could be brewing. The Architectural Billings Index fell to a score of 47.7 in October from 51.7 in September, signaling a decline in architectural billings below the neutral 50 score and fewer projects in the pipeline for construction.2
“What we witnessed, especially over the last decade, is that the Fed controls the markets. When money is cheap and abundantly available, the economy thrives. When it is not, you see the AIA Billings Index come down,” Calderone said. “Seeing how the Fed plays its hand out would be particularly helpful in prognosticating where the future of the economy goes, since we are long outside of a scenario where the economy truly revolves around unadulterated economics.”
Interference in the economy, despite any good intentions, has a price in the long term, Calderone explained. “When you take the stimulation away and take the training wheels off an economy, which has not functioned autonomously, it tends to create uncertainty in the markets. Combine that with the Fed trying to cool off inflation, driven, in part, by supply constraints, and it is not easy to develop operational strategies or raise capital in these markets.”
The Dance of Inflation and Interest In June 2022, the annual inflation rate crossed its highest threshold in 40 years at 9.1% nationally, but more recent data shows it is on the decline from that peak at 7.5% in October 2022. In Metro Detroit, the rate of inflation is up 8.5% from October 2021 to October 2022. Attempting to quell this trend, the Federal Reserve Bank raised interest rates by 75 basis points after four rate hikes on pace to target the 3.75% to 4% range.
Hitting this moving target in a dynamic economy is a hard task to accomplish, according to Baird. “If we don’t see inflation continue to trend downward toward the Fed’s 2% goal and it instead becomes embedded in the economy at a higher level, we have a much bigger problem. That would force the Fed to move even more aggressively in tightening.”
The number Baird watches more closely to see if the Fed can hit this target is Core Inflation as opposed to “headline,” or CPI inflation. Core Inflation
measures the change in the costs of goods and services excluding energy and food prices. According to the most recent data, Core Inflation is hovering at 6.3% after reaching a cyclical 6.6% peak in September 2022.3
“As the Fed fell behind the curve and inflation rose well above forecasts, we’ve seen the transitory inflation argument weaken. The sustained rise in core inflation, particularly in the prices of goods and services that tend to be stickier, suggest that inflation could remain above the Fed’s 2% target for some time to come,” Baird said. “To have confidence that the Fed’s rate hikes are having the desired effect, we need to see core inflation come down.”
The Fed’s interest rate hikes may coincide with inflation cooling, but the relationship between interest rates and inflation is not a precise one, Baird said. “I’m fully confident that the Fed has the tools at its disposal to rein in inflation. The question is whether or not the Fed can do this without sending the economy into recession. I never say never…but what we've seen all too often in the past is that central banks, including the Fed, in their attempt to cool the economy ultimately fail to orchestrate a soft landing, unintentionally bringing about a recession.”
Due to the long and variable lag in monetary policy achieving its goal, Baird said the economy at large hasn’t yet felt the full effect of the Fed’s interest rate hikes this year. “We don't yet know what the cumulative impact of this year’s rate increases will be or how big of a bite they will take out of near-term economic growth.”
Calderone feels that inflation is here to stay. “The punchline in my opinion is that probably in the most dovish scenario, the Fed will still hike another 125 basis points. That probably happens sometime in the first six months of 2023. I think we will be looking into at least mid-year 2023 before the Fed slows down and/or lowers rates.” This translates into challenges for the viability of construction projects, Calderone added. “We are sure to see some postponed or put on hold until the financing costs come back down.” A Modest Recession The past two recessions were exacerbated by factors that were atypical, aligning with a global financial crisis in 2008 and a pandemic in 2020. In Michigan, the Great Recession was particularly painful with an economy dependent largely on the auto industry. Compared to 2008, Michigan’s business climate and auto industry are in a better place.
Michigan’s tax system ranks 12th overall according to the 2022 State Business Tax Climate Index. Also, rising profit margins show that the automotive industry is in better shape than in 2009 when GM and Chrysler filed for Chapter 11 bankruptcy.
“It’s possible that a recession in the near term could be comparatively mild — much more like a ‘typical recession’ that may more closely resemble those in 1990-1991 or 2001,” Baird said. But he added that there is a good case to be made that some parts of the economy may already be in recession. “The housing market is already seeing it with a sharp decline in residential investment last quarter coming off of the earlier boom in demand. I would argue that the housing sector is already in recession.”
According to the advance estimate of Q3 GDP released by the U.S. Commerce Department, residential investment contracted at a 26.4% annualized pace in the three months ended September 30.4 In comparison, GDP statistics on the Q4 of the 2008 financial crisis saw residential investment down 33.6%, while the coronavirus pandemic saw Q2 of 2020 down 27.4%.
“The big issue I see economically right now is that the housing market is in a recession, but the rest of the economy is not,” Calderone said. “So, I think some of my comments aren’t applicable to the [combined residential and nonresidential construction] industry as a whole. I think we are going to see some very challenging times ahead for homebuilders.”
The National Bureau of Economic Research will get the final say as the official designator of the term “recession”
for the U.S. economy. Earlier this year, after two quarters of negative GDP growth, President Biden pushed back on the media using the term recession, citing job growth and foreign business investment.5
Baird said this pain is a euphemism for job losses and a sharp slowdown in growth. “The problem is that once growth slows considerably below trend, it is awfully hard to avoid a recession.” However, the unusually tight labor conditions of the past year may be a consideration for employers bracing for a potential downturn, Baird said. “Given how tight labor markets have been, some employers may be slower to trim their workforce, particularly if they believe the recession may be relatively short-lived. Regardless of business or industry, for the last few years, trying to find people to fill job openings has been extremely difficult. That alone may cause some employers to think harder about trimming their payrolls prematurely.”
According to a July 2022 report from Associated Builders and Contractors, there are job opportunities left unfilled for approximately 434,000 construction workers.6 “I do think if employers are looking at this, they will be saying ‘My gosh, we have such a hard time finding people, I don’t know that I want to cut them now only to have to try to find replacements in the near future.’”
In the construction industry, Calderone said that professionals should expect more of the same — tight labor conditions. “Getting the tradesman on the jobs will continue to be a big challenge,” Calderone said. “With the retiring of the baby boomer generation, we don't see a replenishment of those skilled laborers.”
Calderone added that a unique problem for Michigan is the state is losing population. The U.S. Census Bureau estimated that the state lost -0.3% of its population from April 2020 to April 2021.7 “We’ve lost people over the years, and that doesn’t bode well for the skilled trades. We should expect continued labor shortages, and that will constrain the industry particularly as all of these projects move forward.”
Industrial Manufacturing Soldiers on A bright note for the construction industry is Michigan’s projected growth in the EV battery industry. Our Next Energy, Gotion, Ultium, and LG Energy all announced massive battery plant investments throughout the state with a combined value of more than $8 billion.
Looking to keep the investment going in Michigan, the Michigan Legislature approved a $1.1 billion supplemental spending bill with $496 million for future economic investments – $206 million of which is reappropriated from the previous year with the addition of $350 million for site development statewide.8
“The fact that Michigan appears committed to industries with strong future growth potential bodes well for the state’s economy in the long term. You don’t want
your economy to be reliant on being the last manufacturer of buggy whips,” Baird said. “At the same time, we have to find the balance that will still allow for investments to be made in the technologies we need today since this transformation will take time.”
This new investment bodes well for the construction industry as well, Calderone said. “Anytime that the government mandates something and is willing to put its capital at risk to pursue it, the parties who are contracting those projects are going to experience very favorable situations,” he said. “I think the infrastructure will be built out, and I don’t see a political situation in the state or nationally that will result in any of this slowing down.”
In the next few years, anyone positioned to take on electrification, including battery plants and other clean energy infrastructure projects, will likely have profitable years ahead, Calderone added. “Long term, after the infrastructure is built out, whether or not that transition is viable on the currently contemplated timeline is another question. But chasing Uncle Sam’s wallet is never a bad idea in business.”
Preparing for Uncertainty With economic uncertainty on the horizon, construction professionals are increasingly looking for ways to bend rather than break if the construction With economic uncertainty on the horizon, construction professionals are economy were to take a downturn. Keeping in mind a variable cost infrastructure plan is a good way to maintain flexibility in uncertain market conditions, increasingly looking for ways according to Calderone. to bend rather than break if the “The concept of operating construction economy were to leverage entails maintaining a very take a downturn. Keeping in large fixed-cost infrastructure: In mind a variable cost infrastructure plan is a good construction, it can be a large headquarters, everyone on the payroll, and having your ownway to maintain flexibility in electricians and carpenters, etc.” uncertain economic conditions, Calderone said. “With this big fixedaccording to Calderone. cost infrastructure, once you generate enough profit to break even, the next dollars flow right down to the bottom line.” When economic conditions are favorable, this rigid structure works fantastic due to not having to pay for premiums on the market for labor and equipment, Calderone explained. “But for a general contractor, the safest area to be in when there is economic uncertainty is to make
your margin on managing the job and not to carry all the trades you need in order to self-perform the work.”
This approach does sacrifice margin but will protect the organization in the long run, Calderone emphasized. “The safest way to protect yourself in times of economic uncertainty is to make your margin while carrying a minimal amount of fixed cost.”
In the near future with the construction industry, the time is not ripe for major layoffs and excessively slicing fixed cost infrastructure, Calderone stressed. “But this option is something that must be kept front and center on the dashboard. When we work through all these backlogs, we could get to a scenario where incremental financing costs and other economic issues come home to roost. Being in a position to react is of paramount importance.”
Staying vigilant with access to highquality financial and operational information will be paramount moving into the upcoming year and beyond, Calderone said. “In my experience, navigating uncertainty is much easier to do when you have processes in place to develop a reliable financial crystal ball. If there was ever a good time to beef up forecasting abilities and overall analytic rigor within the finance and operational functions of construction contractors, it is now.”
Sources:
1. https://www.aia.org/articles/6526013what-recession-aia-consensus-construction2. https://www.aia.org/pages/6567531-abioctober-2022-architecture-firm-billing 3. https://tradingeconomics.com/unitedstates/core-inflation-rate 4. https://www.bea.gov/news/2022/grossdomestic-product-third-quarter-2022-advanc e-estimate 5. https://www.cspan.org/video/?c5025689/ that-sound-recession-me 6. https://www.abc.org/News-Media/NewsReleases/entryid/19489/construction-job-ope nings-decline-in-may-says-abc 7. https://www.census.gov/quickfacts/fact/ table/MI/PST045221 8. https://www.michiganbusiness.org/pressreleases/2022/10/tji-whitmer-approves-additi onal-investment-in-soar-fund-attracttransformational-projects-to-state/ The “Building Michigan” podcast features current news and information regarding the latest construction techniques, methods and equipment, as well as economic updates and interviews with key people in Michigan’s commercial construction industry. Listen to the “Building Michigan” podcast at buildwithcam.com/podcast or on your favorite podcast platform. Contact cam@buildwithcam.com for podcast sponsorship opportunities or with suggestions for future podcast topics.
