Working to Build a Better Minnesota
Associated General Contractors (AGC) of Minnesota
Associated General Contractors (AGC) of Minnesota is the voice of Minnesota’s construction industry. “We try to promote the construction industry in any way we can,” says AGC of Minnesota CEO Dave Semerad. “We try to make Minnesota a good business environment for contractors. Our members are committed to improving the industry and their communities.”
The non-profit professional trade association provides a centralized point of focus for industry information, education, safety, construction labor relations, and training, as well as promoting a favorable statewide business climate for its members.
As the first recognized chapter of the Associated General Contractors of America, AGC of Minnesota has been promoting the state’s construction industry since 1919. The association focuses on the highway and building sectors of the market, including heavy and municipal utility construction. Members include general contractors, specialty contractors, and affiliated businesses that have a vested interest in these industries.
The association’s impact extends beyond its members to the entire community. “Wherever you build a bridge or a road or a transportation system, you are creating an opportunity for vertical construction as well,” Mr. Semerad points out. “When you complete an intersection, a big interchange, or a new bridge, soon after you have commercial and multi-family development, schools, and manufacturing facilities. You have projects that are going to be built that are not only good for the construction industry, but are good for the economy and for the community.”
After the slowdown experienced during the recession, Minnesota’s construction industry is enjoying stability. “We are at a steady state right now,” Mr. Semerad reports. “I would say the industry appears to have recovered from the 2006 recession, but we still have some contractors who have not found their niche or participated in the recovery. There is a question as to whether we will ever get those employment numbers back from the high water mark [of] February 2006.” Currently, there are about 25,000 fewer jobs than there were at the industry’s peak.
AGC’s annual industry assessment provides valuable insight into the state of Minnesota’s industry. This year’s survey has shown that “We are really not hiring a lot of new people; we are not laying a lot of people off; we are at a steady point in the market right now. There are no clear signs of more growth here or if we are going to start to decline, but for right now it is steady. There is a sense of stability, but not enough to keep many contractors from planning for the next downturn.”
The industry’s greatest concern at the moment is finding skilled workers. “The workforce is our biggest challenge right now,” Mr. Semerad remarks. “No question about it.” As the workforce ages, many experienced workers are retiring – and as these workers retire, there simply are not enough skilled workers to take their place. Part of the problem is that young people today are not given a pathway into the trades as they once were. “You no longer have the shop classes in high school,” Mr. Semerad points out. “Kids are not working on mechanical projects with their hands and are not as mechanically inclined as what we saw 15, 20 years ago.” As a whole, the American educational system has moved away from vocational training in favor of an academic path, narrowing opportunities for young people who prefer to work in the trades. Semerad says that the construction industry has lots of work to do to connect with the next generation of workers, and should use technology to make improvements in this area. He also believes the industry needs to market itself differently to the next generation. “The industry needs a new image, and that will require lots of work by all stakeholders.”
AGC of Minnesota is working to create pathways into the construction industry and to show young people that construction can provide a lasting career – not just a job. “We are working to change the image of the industry. That is an important thing.” For instance, “We are involved in a major effort with the Minnesota Building Trades and St. Paul Technical College on a very substantial workforce initiative that is designed to address preparation for construction careers, focusing on the Twin Cities initially. We are looking at what we can do today to affect the workforce 15, 20 years from now because we see that, if we continue to go on the path we are on, we are going to have more work than workers.”
Embracing diversity is also key. “We recognize changing demographics and want to ensure our industry is inclusive to women and minorities and provides them every opportunity to come into the industry, receive training, and then get on a career path that contributes to their long-term success. We need young men and women of all races and ethnic backgrounds to have access to the opportunities in this industry.”
Safety is another AGC of Minnesota priority. “Safety is probably more important today than it has ever been because you have a workforce that is not as experienced today. With that inexperience comes additional risk.” Fortunately, local industry is strongly committed to safety. “We are blessed with contractors and workers who understand the importance of safety. We make every opportunity to provide them with initiatives and measures that can help them with their safety efforts.” For instance, the Construction Health and Safety Excellence [CHASE] program recognizes AGC member contractors for their safety programs and performance while providing incentives for partnership. “Our CHASE program is extremely successful,” Mr. Semerad remarks. Launched in 2002 by Minnesota OSHA and AGC of Minnesota, the program was recently revised to reflect current industry best practices and provide a new jobsite-specific recognition level. “We have a number of contractors who participate. CHASE is designed to raise the bar for the safety culture and to make sure the project owner knows how committed these contractors are to safety and health. CHASE contractors have differentiated themselves from competitors and have better insurance rates and productivity than non-participants.”
AGC also works to improve the construction climate through legislative action.
“We have an ongoing effort to educate contractors on political action. We’re representing their interests at the Capitol so the industry has a strong voice.” Transportation funding will be a major focus this year. “That is going to be a big issue for 2016. We are going to put a lot of resources and effort into passing a significant transportation bill. Minnesota’s economy cannot fully prosper without major improvements to our transportation infrastructure.”
AGC is also working to reduce burdensome and unnecessary regulation overall. “The public sector is overregulated right now, and the regulation is inconsistent, depending on various factors, causing many contractors to rethink their business models,” Mr. Semerad says. “Many contractors have told me they have considered not continuing to pursue public works to the extent they have in the past. If there is private work to do, they would prefer to work in the private sector.” This is unfortunate because “you want the state and the taxpayers to have the benefit of all the best contractors and the competition.”
Decreasing regulation could help boost the industry as it continues to recover from the recession. “The problem is that the industry has to deal with extra costs of regulation at a time when most contractors have downsized. We try to address these burdens legislatively wherever we can, but we are also pragmatic in knowing when we can and when we can’t. We choose our fights pretty carefully. There are some fights we can win and a lot we can’t, but we at least want to make an effort to soften the legislation so it is manageable.”
Looking ahead, AGC of Minnesota will “continue to focus on promoting legislation that generates revenue streams for contractors, including transportation funding and bonding.” With the industry in a positive, steady state, the future looks bright. Through education and safety programs and services, workforce training, industry information, and lobbying efforts, AGC of Minnesota is doing its part to keep the industry healthy – and to make steady progress at Building a Better Minnesota.