March 2, 2010
Interview
Post-recession activity a concern for construction industry: EllisDon CEO
Most mid- to large-sized general contractors will likely weather the worst of the great recession by working through their backlogs and relying on government stimulus projects.
But EllisDon’s chief executive admits he’s concerned about what awaits the construction industry farther on down the road.
“We are very worried about 12 to 18 months out,” Geoff Smith told Reed Construction Data in a recent interview at the company’s Mississauga head office.
“It just seems to me that governments can’t maintain stimulus spending forever to a really significant degree without getting themselves into all sorts of fiscal trouble.
“And if the private sector doesn’t come back, and there’s no sign of it yet, then I think we could be looking at a crunch about 18 months from now, or earlier.”
As of early June, the federal government said it has committed approximately $2.8 billion of the $4-billion Infrastructure Stimulus Fund, and more than 1,700 projects have federal approval to start work.
Geoff Smith
“I have to tell you, I’ve been very impressed with how fast they’ve gotten the money into the market,” Smith said.
“In this current recession, we’ve seen the construction projects, and therefore the stimulus monies, come to market faster than in the last recession, and certainly way faster than the recession before that in the early 1980s.”
Turning his focus to new technologies, Smith said that Building Information Modeling (BIM) is the way of the future, adding that those contractors who don’t adopt it will be left behind.
“If you don’t (embrace BIM), you’re not going to make it down the road,” he said. “It’ll take a little while to take hold, because it requires some upfront investment on the part of the clients and the builders. But it’s coming. Everybody has got to embrace it as soon as they can find a way to.”
The same applies to social networking, which Smith has embraced — he’s on Twitter, Facebook and he blogs.
Social media is a key element of the company’s forward-looking strategy, he said.
“The construction industry over past generations has always been about people — we sell people; we put people on a project.
“Now there is the opportunity and the means to sell knowledge, intellectual capital and to create a competitive advantage doing that — and we see the social media facilitating that and creating that opportunity.”
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