OHIO: An Introduction to Construction
2024 looks to be more of the same in Ohio for the construction industry. Clients continue to manage increasingly complex and costly challenges associated with major projects, facilities, skilled labour forces, suppliers, and real estate. The advancement of public infrastructure projects, together with other government manufacturing initiatives throughout the Midwest, is resulting in a healthy demand and exerting some longstanding pressures on the construction industry in Ohio.
Skilled labor shortages, supply chain difficulties in certain areas (particularly electrical components), and shortages of certain raw materials continue to create project challenges and require careful planning and preparation to ensure a profitable project. The industry, historically slow to adopt change, is relenting to the increased use and acceptance of certain technologies such as 3D printing, the use of drones and other forms of AI and modeling tools that can improve efficiency.
Major Financial Investments Continue in Ohio Amid Headwinds
Against this challenging backdrop, sweeping construction projects continue in Ohio. Two of the biggest employers in north-east Ohio, the Cleveland Clinic and the Sherwin-Williams Company, are continuing with major projects in 2024.
Sherwin-Williams is close to completing the construction of a new headquarters tower on Public Square in downtown Cleveland, with an attached multi-level garage, as well as a research and development center in the suburb of Brecksville. The 36-floor headquarters will house more than 4,500 employees – professional staff, engineers, technicians, and chemists – with room to accommodate future growth. Sherwin-Williams says the project will entail a minimum investment of USD600 million over the next few years.
Major projects are making headlines elsewhere in Ohio, as well. The most significant of these projects is Intel, which is pursuing plans to spend USD20 billion on two advanced chip factories in Licking County, just outside Columbus. Although there are a few significant projects underway in the private sector, concerns are on the rise in Ohio that those projects may slow, be put on hold, or have follow-on phases suspended or cancelled owing to concerns with inflation and high interest rates impacting lending.
Federal Funds for Ohio – Bipartisan Infrastructure Law
The Bipartisan Infrastructure Law, signed by the President in late 2021, has identified more than 150 specific Ohio projects for funding.
Across the state, there are 1,377 bridges and more than 4,925 miles of highway in poor condition. Ohio is set to receive more than USD4.3 billion to invest in roads, bridges, public transit, ports, and airports, and more than USD240 million for clean water projects.
As more projects are announced in coming months, the federal investment in Ohio roads and bridges is projected to ramp up to USD9.8 billion. Ohio also is in line for a minimum of USD100 million to help ensure high-speed internet coverage across the state. And more than USD131 million was allocated to Ohio in 2022 for pollution clean-up, such as capping orphaned oil and gas wells and reclaiming abandoned mine sites.
As funds from the Jobs Act are starting to appear, the heavy highway and infrastructure sectors anticipate a busy year.
Looking Ahead
As with 2023, going forwards there remains uncertainty with regard to the extent to which how the lack of available skilled labour, inflation, ongoing material supply chain issues, and high interest rates will impact project plans in Ohio, especially in the private sector.
Government funding that is now beginning to flow from the Bipartisan Infrastructure Law and the Chips and Science Act (which provides USD280 billion in new funding to boost domestic research and manufacturing of semiconductors in the USA), as well as the Inflation Reduction Act (designed to curb inflation by reducing the deficit, lowering prescription drug prices, and investing in domestic energy production while promoting clean energy), are expected to keep public sector construction very busy in 2024.