Construction Consumers Council Panelists Predict

Millennial Growth Will Drive 2020 Urban Projects, Construction Consumers Council Panelists Predict

SLCCC breakfast at Transportation Museum. Photo by Mary Butkus


More than 125 industry leaders gathered at the Museum of Transportation in Ballwin Dec. 12 to learn the status of the A/E/C industry and the forecast for 2020. The annual forecast event was presented by the St. Louis Council of Construction Consumers (SLCCC).

Joe Downs, executive VP and general manager of The Opus Group, shared several leading indicators Thursday morning showing that St. Louis is headed toward a healthy commercial construction climate next year. “We are seeing an extreme population growth in the millennial population, and overall vacancies in the office market have been declining,” Downs said. “As we look at the downtown and central corridor areas, there is a general sense of excitement about what is going on here. Things are going to continue to explode (in 2020), with urban revival creating a perfect storm for millennial demographic growth in urban St. Louis. Since we’ve never really experienced this before in urban St. Louis, now we are undersupplied, as a community, in multifamily,” he added.

Otis Williams, executive director of St. Louis Development Corporation, agreed. “We are seeing a growing phenomenon in the millennial class when it comes to the central corridor,” said Williams. “Areas like the Grove are doing great, Cortex is what I like to call my Cadillac, and in five years, people won’t recognize the area along Chouteau Avenue.”

David Kehm, corporate market leader and associate principal at Christner, offered a slightly less optimistic prediction. “Architects and engineers are the canaries of the coal mine,” Kehm said. “What happens to us is what will happen to the rest of the industry in the following 12 months.”

Kehm referenced lower numbers on the AIA Architecture Billings Index. The diffusion index, derived from the AIA Economics & Market Research Group’s Work-on-the-Board survey, serves as a leading economic indicator that leads nonresidential construction activity by about a year.

“That said, despite the national numbers, the outlook isn’t entirely bad and 2020 looks to be another good year for design firms here in our area,” Kehm added.

Dirk Elsperman, COO and executive VP at Tarlton Corp., said the most disturbing scenario right now for construction industry owners and partners continues to be the scarcity of available craft workers. “The workforce pipeline is only fair or even poor,” said Elsperman. “This is the number-one issue I hear as I travel around the country. Workforce is everything and we are losing expertise and knowledge much more rapidly than we can keep up with it. We are now having to find better ways to work together and to fill gaps by spending more money in the tech area. In the past five years, as an industry, we’ve spent more in tech than we have over the past 20 years.”