Demolition contractors looking to build on 2019

As 2019 comes to a close, the construction demolition market is reflecting on a largely positive year.

“Activity for members remains strong across the board,” says Christopher Godek, owner of New England Yankee Construction and president of the National Demolition Association (NDA). “All aspects of the demolition industry – remediation, total demolition, select demolition, concrete removal, and recycling – have strong current books of business. Most have a backlog stretching into the first quarter of 2020. Contractors that perform power plant demolition have an [even] further reaching backlog.”

Still, 2019 presented a fair share of challenges to contractors. For example, the effects of tariffs and trade conflicts were felt on the frontlines of the industry.

“The scrap market has slowed some growth as members are feeling the effects of trade relations with China,” Godek says. “We are seeing members take additional work downstream as a result.”

One pressing challenge continues to persists: finding the skilled labor positions that are necessary to do work.

“The labor market remains tight, with many members seeing a shortage in skilled labor,” Godek says.

Safety and health regulations continue to be a point of contention, as well.

“It’s important for our industry to have a seat at the table when the federal government looks to regulate,” says Kevin McKenney, director of government affairs at NDA. “We recently completed comments for the Occupational Safety & Health Administration on crystalline silica regulations, and are doing the same for a proposed rule on exposure to beryllium. [We] also weigh in on labor regulations to ensure there is an appropriate balance between protecting both workers and employers.”

2020 expectations

As Godek mentioned, backlogs for demolition contractors are strong and stretch into the early months of 2020. Many contractors, however, question how much longer the economic upswing can last before the bubble bursts.

“Members are cautious given the scrap and tight labor markets,” Godek says. “More concerning is the uncertainty that the scrap market is creating. Scrap prices, combined with fuel prices dropping, continue to create uncertainty in many businesses.”

Despite the uncertainty, Godek retains reasons for optimism about 2020.

“The bright side is that money is still cheap and projects are still being financed,” Godek says. “We are hopeful that additional power plant closures, ample financing and infrastructure investments will help create an uptick in business.”