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May 2, 2013

Survey: Rider Levett Bucknall

Specialty: Cost consultancy, project management, advisory services

Management: Julian Anderson, Americas president; Chris Burris, associate principal based in Seattle

Founded: 1991 (North America)

2012 revenues: N/A

2013 projected revenues: N/A

Rider Levett Bucknall offers construction project management, cost consulting and advisory services to the public and private sectors. The firm has more than 100 offices around the globe.

Chris Burris, a Seattle-based associate principal, and Julian Anderson, the Phoenix-based president of the firm’s Americas region, responded to questions from the DJC about the economy and local construction trends. Their answers have been edited for publication.

Q: Has Seattle gotten over the effects of the recession? What’s the status of the construction industry here?

Burris: The Seattle construction market is definitely on the upswing. The general contractors, subcontractors and suppliers who weathered the storm are well positioned to take on the upcoming work.

Looking forward, as more projects come online, there could be a shortage in skilled labor. Many experienced tradesmen, project managers and superintendents departed the industry during the downturn and many will not immediately return. As the need for manpower increases, the general contractors and subcontractors may be frantically searching for staff to complete the projects they have contracted. In time this will sort itself out, but in the meantime there will be some growing pains as companies rebuild to pre-downturn size and volume.

Q. What’s the broader outlook for the industry?

Anderson: While the industry is not quite out of the woods, it is certainly in the best position that it has been since 2008. Looking ahead, the Federal Reserve’s policy of continuing low interest rates will definitely help, as will increasing city, county and state revenue streams along with the strengthening of the housing market. Headwinds from the dysfunction of Washington, D.C., will be an unwelcome drag but, barring some new economic shock, will probably not be enough to arrest the industry’s momentum.

Q: After the local apartment boom peaks, what’s next?

Burris: We see an immediate need for renovations to existing facilities that may have been put on hold during the recession. Some large companies in the area are expanding/consolidating operations and requiring more campus-style office space, although it appears there is still office space available for lease.

Q: What trends are you seeing with bid prices?

Burris: Bid prices seem to be on the rise, if only slightly.

Some materials have seen modest increases. Base metals such as copper are under downward price pressure, and overall competition among suppliers appears to have kept inflation relatively in check. Important commodities pricing such as crude oil continue to fluctuate.

Pricing of oil has a direct relationship to construction pricing. Many products used in construction are derived from petroleum, such as certain roofing materials, pipe and asphalt paving. Operation of earth-moving equipment and materials delivery costs can also fluctuate with the price of fuel.

Q: How did the recession affect your clients and services?

Burris: Prior to the downturn many owners appeared to be focusing on the life-cycle cost of their buildings.

While I’m sure owners are still concerned about the life-cycle cost of their buildings, this concern took a backseat to reducing the first or capital cost as belts got tighter. Consequently, we have seen owners more focused on the core services our company provides, such as project management and construction cost estimating.

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