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W W W. M A I N E B I Z . B I Z 25 A P R I L 1 7 , 2 0 2 3 R E A L E S TAT E / C O N S T R U C T I O N / E N G I N E E R I N G for multiple options for product options, while also building in the potential need for flexibility during construction so the company can pivot to an equal or similar manufactured product if necessary. "Additionally, earlier procure- ment of trade contractors — as trade contractors are filling up backlog farther out in the year — is impor- tant," he says. "We have found that, especially on larger projects, it is necessary to engage the specialty contractor market much earlier, and long before construction documents are complete." Cost of labor Another issue for the total manufac- tured cost of construction is the grow- ing cost of labor. "e biggest issue are trades that require a skilled trained workforce that might not be talked about at the kitchen table as a profession or career yet require a certain aptitude and years of hands-on training," says Hebert. But he says he's started to see a shift, with more qualified workers applying for open positions and some younger people showing interest in the industry. "In 2021 and 2022, there were a lot of unskilled people on jobs filling posi- tions due to extremely high demand," he says. "Now we're starting to see more people interview for positions in the field who have the skills and the aptitude that's needed to be able to grow and create a career." AGC Maine's Flagg says the association is addressing the labor challenge by promoting pre-appren- ticeship programs throughout the state, including the launch of its first Maine Construction Academy – a six-week construction immersion program geared to prepare out- of-school youth for construction apprenticeships. Cautious optimism Industry pros are cautiously optimistic for the coming year. "Our optimism is anchored in the growing acknowledgment that Maine is a great place to work, live and play," says Zachau. "We believe that despite the inflationary pressure and rising interest rates this will continue to fuel business growth and the need for all types of housing in southern Maine." He adds, "Higher interest rates will impact the closing of deals, but a strong backlog will provide conti- nuity while adjustments are made to advance good projects." Tonello's predictions include increased demand and wages for skilled trade workers; slowing of new office construction and increase in office to housing conversions; increased construction in manufac- turing, onshoring and clean energy projects; and slowing of projects that are heavily reliant on commercial interest rates. French says that, while he's seeing some projects being delayed, none are being canceled. "We're still forecasting a good book of business for 2024 and 2025," French says. Hebert predicts that quality will prevail over quantity, lending will remain steady and align with projects that make sense, and interest rates will stabilize or even relax slightly. Hebert's strategy? "We have been focusing on our peo- ple, continue to build relationships with our subcontractors and suppliers and we are honest with our customers," he says. "Our customers are smart people. ey can deal with the information and they appreciate transparency and teamwork and that is what we deliver." Schreiber, Mainebiz senior writer, can be reached at lschreiber @ mainebiz.biz (207) 829-5549 MainLineFence.com When the safety and security of your business is at stake, a good fence is one you can count on. Many industry experts are continuing to forecast overall price escalation of approximately 5%. — Jeff Zachau Zachau Construction P H O T O / Z A C H A U C O N S T R U C T I O N F O C U S Jeff Zachau, president and CEO of Zachau Construction in Freeport, says escalation of some construction costs has leveled off.

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