Construction Hasn’t Recovered From the Downturn

Bill Wilhelm: “I think that a lot of that is because a lot of general contractors are still working off some bad debt projects from the bad times.”

LOS ANGELES—The construction industry still hasn’t recovered from the downturn, according to Bill Wilhelm, president of R.D. Olson Construction, who sat down with us at ALIS last week to talk about the hotel development industry. High pricing has been a well-known problem in the development world, but Wilhelm attributes the issue to the shortage of subcontractors rather than the increase in materials costs.

“Across the board pricing has plateaued, but it had gone up so aggressively,” Wilhelm tells GlobeSt.com. “Pricing is one part of it, but the bigger problem today is workforce; that is a bigger problem than anything. Materials cost is relatively level; the problem is the labor force because on the general contractor side, the margins aren’t going up. I think that a lot of that is because a lot of general contractors are still working off some bad debt projects from the bad times.”