State Engineering Leaders Share Their Perspectives Engineering Georgia had the recent honor of hosting a roundtable discussion with a group of leaders from across the state’s engineering industry. Representing a variety of different sized firms, practice areas and geographic locations, we invited them to share their thoughts on Georgia’s current economy and where they believe it is heading in the next 12 to 18 months. We are excited to share a glimpse into this conversation and hope that you, as our reader, gain valuable insight from their perspectives. DON HARRIS, P.E. Area Manager, Alabama and Georgia AECOM Recently heralded by Fortune magazine as one of the World’s Most Admired Companies, AECOM is the world’s No. 1 ranked engineering design firm. “Built to deliver a better world,” AECOM designs, builds, finances and operates infrastructure assets in more than 150 countries around the world across a broad range of markets, including transportation, facilities, environmental, energy, water and government services. DORIS WILLMER, P.E. President and Principal Consultant Willmer Engineering, Inc. Since 1982, Atlanta-based Willmer Engineering has been committed to providing its clients with geotechnical engineering, environmental engineering and construction materials testing services. Willmer Engineering’s client list reflects a myriad of entities, including Fortune 500 corporations, financial institutions, developers, engineers, architects, health care providers, educational institutions and aviation authorities, as well as local, state and federal governments. JEFF PARKER Vice President HNTB HNTB Corporation is an employee-owned infrastructure solutions firm serving public and private owners and contractors. With more than 3,500 people and over a century of service, its professionals deliver a full range of infrastructure-related services, including award-winning planning, design, program and construction management. Boasting offices across the nation, HNTB consistently ranks among ENR’s Top Design Firms. Its projects have won numerous awards, including three Grand Conceptor Awards from the American Council of Engineering Companies. G. HOLMES BELL, IV, P.E. CEO and Chairman Hussey Gay Bell Established in 1958, this privately held Savannah-based engineering and architectural design firm has more than 120 professional engineers, architects and surveyors on its roster. Hussey Gay Bell currently has offices in Georgia, South Carolina and Saudi Arabia. Offering a comprehensive range of engineering disciplines including civil, water/wastewater, transportation, environmental, structural and geotechnical services, it has been an ENR Top 500 Design Firm for more than 10 years. TOM GAMBINO, P.E. President Prime Engineering, Inc. Having recently celebrated 25 years of business in January 2015, Prime Engineering, Inc. is an employee-owned, fullservice consulting firm based in Atlanta. The firm off ers fully integrated planning, surveying, engineering, architecture and construction project approaches, while concentrating on specific areas of expertise that include municipal, site development, surveying, transportation, aviation, designbuild, facilities and industrial. MODERATOR: How do you think the overall national and state economy are going to perform in 2016 compared to 2015? TOM GAMBINO: Well, a lot of our practice is petroleum-based, so $40 a barrel crude oil is a problem. A lot of our bigger projects have been put on hold because of that, so nationally our projects have slowed to just break-and-fix, repair-type projects. Locally, we’re pretty steady; I expect about a 12 percent growth rate for the year right now, so stronger than it has been. MODERATOR: To follow up on your answer, when oil was north of $80 a barrel, there was a lot of conversation about energy independence in the United States and lots of engineering firms were looking at the energy space. What are your thoughts about the energy sector now? GAMBINO: The natural gas part of the industry is really driving everything. And, our national problem is that we don’t have the infrastructure to trap the natural gas and move it to markets that use it. If you look at an infrared map of the United States, there’s a big glow in North and South Dakota, which is where they burn off all the natural gas. It has the same infrared signature as the signature glow over Chicago. So, they burn off as much energy per day as Chicago uses in a day. As soon as we can trap that natural gas and put it back into the liquid form and move it, I think that’ll result in more energy independence. DON HARRIS: AECOM has a fairly large oil and gas practice, and it’s having to adjust to reflect the marketplace. What we’re seeing is that a lot of the power plants are converting to natural gas, so you have the pipelines and that’s really a pretty robust market. You just recently saw where Southern Company is acquiring Atlanta Gas Light. Duke Energy just acquired Piedmont Natural Gas. These are not coincidences. That’s the segment of the energy market that we see as robust and where we’re focusing our service offerings. DORIS WILLMER: In terms of the overall economy, I call it the long, slow grind. You know, we’re all just grinding through this. We feel fortunate that, despite the recent recession, we were able to keep our core people. And now, we’ve added a good number of people this year and we plan to add at least 10 or 15 new people next year to meet the demands of the work. That being said, I really don’t think we’ll get much above that two percent growth in GDP. Hopefully we’ll see a spurt, but I just see it being “steady-eddie.” HARRIS: Expectations for AECOM here in Georgia are somewhere between four to seven percent growth. There was a recent article in the Atlanta Business Chronicle that talked about Georgia being one of the best places in the country for engineers right now. And certainly, there are a lot of exciting things going on here. But, I’m with Doris. It’s going to be a grind. You know times are certainly better than they used to be, but I haven’t heard anybody singing “Happy Days Are Here Again.” MODERATOR: It’s better than 2010, but not as good as 2007. HARRIS: Yes, pretty much. HOLMES BELL: Our firm was founded in 1958 and we were fortunate during the recession. We had very few layoffs. We have about 120 engineers, architects and other staff and we were blessed by having a lot of government work in the recession – and we still do. We slowed down a lot during the recession, but we’re certainly having a good year this year, particularly in our Savannah and Atlanta offices. I wouldn’t say we’re back at pre-recession levels, but based on our backlog, I think 2016 is going to be promising. JEFF PARKER: My economic outlook is really focused around the transportation space. That’s where our focus is. So, what I see going is that as a firm, both here in Atlanta and nationally, we’ve got a bigger backlog than we’ve ever had in the 101 years we’ve been in business. And, as you look forward in terms of the long-term investment in transportation, I think just the notion that we’re going to have a longterm federal funding bill, in addition to the new funding provided by House Bill 170 [The Transportation Funding Act of 2015] at the state level, is huge for us. So, I think that the industry outlook, at least in the transportation space, is very, very strong. HARRIS: You know, to tag along on what Jeff is saying, certainly the transportation sector is the best it’s been here in Georgia in almost forever. One of the things I find exciting is transit. For the first time, MARTA is a part of the conversation. They got some flexibility during the last legislative session on the 50/50 restriction between capital and operating, and they’ve started the conversation about possible expansion. And, they stand to get most of the $75 million transit bond package. So, it’s baby steps, but you know these are the first baby steps for transit in 30 years. That’s a really positive sign. PARKER: It’s baby steps, but clearly the conversation has changed in terms of leaders starting to understand the value of investing in transit in metro Atlanta. They are seeing the direct connection where firms that are relocating to the region are looking to be near transit, and understanding that we’ve got to make transit part of the investment to attract businesses and continue to grow. When I moved out here 10 years ago, it was just a completely different conversation. It was more of a public works discussion. Now, there has been a clear connection between the economic vitality of metro Atlanta and investing in public transportation that’s never really been here before. BELL: For us in Savannah too, related to transportation, Georgia has explosive growth with the Georgia Ports Authority. We do work with the ports, and then you have all the outlying industrial warehousing that’s going on around Savannah. It’s significant. We have an incredibly low vacancy rate in industrial warehousing in Savannah, and in the vicinity. So, there’s a lot going on in that sector. MODERATOR: What other growth areas do you think we’re going to see in the next 12 to 18 months, either practice sector or geographic? GAMBINO: Well, I think some of the single-family home market is starting to come back. There’s still a lot of inventory to be soaked up from subdivisions that are undeveloped, but we’re starting to see infill being a big deal – small developments with five or 10 houses. Also, residential high-rises and apartments. But, I think that multi-family could be reaching over-build or close to it already. That’s kind of locally where I see the growth. The aviation industry keeps on chugging along with long-term projects all over the country – once you get into one project, it could take five to six years to develop it. So, that continues to move forward. But, that’s a geographic presence issue that you have to battle. We’re also seeing a lot of industry and manufacturing moving back to the U.S. and a lot of new factories being built. WILLMER: Infrastructure replacement is going to stay really strong. What the city of Atlanta’s doing, and a lot of the counties as well, is significant infrastructure replacement. I think the pipeline replacement is going to be huge, detention basins and alternatives to those like we did in the Old Fourth Ward – that’s what I see. HARRIS: And in the water sector, we’re seeing more of the push on sustainability, water quality, conservation and reuse. Aging infrastructure is going to continue to be a massive issue for water, and most types of infrastructure, quite frankly. So, I agree with what Doris says. The replacement of those kinds of facilities is going to stay pretty strong. BELL: Infrastructure and water/wastewater is a large part of our business, too. We’re doing a lot of program management now with five-year contracts, to handle large infrastructure projects for various government entities. And so, we’re also seeing a lot of wastewater treatment plants going on in Georgia now – a lot of water quality issues throughout the state. As long as there’s state financing available, these water systems are going to be trying to update their systems as quickly as they can. You’re certainly seeing a lot of that and it’s going to continue well into 2016 and 2017. MODERATOR: We live in a world where even the smallest firms are looking at work outside the geographic boundaries of the state that they’re in. What other states or regions do you think will be hot markets over the next 12 to 18 months? GAMBINO: Well, we’re very busy in Florida, Texas, Indiana and Illinois. Those are very busy areas that continue to grow. PARKER: Yeah, I would add Southern California to that list. There seems to be just an explosion of projects related to public transportation in that region going on right now – just mindboggling. MODERATOR: On the negative side, what do you see as the biggest threats or challenges for the engineering industry over the next 12 to18 months? HARRIS: I think one of the real potential inhibitors to the growth of our industry is going to be the lack of talent. We’re all struggling to find talent. We’re all hiring our competitors’ talent. That’s what’s happening here locally. I think you’re also seeing the same challenges in the construction industry, where they’re not going to be able to find the skilled labor to go out and execute the work. So, I think that’s going to have somewhat of a metering effect on just how robust the engineering market can really become here if we can’t find the people to do the work. GAMBINO: Well, I agree – I definitely think the access to people. We’re starting to see people being more comfortable in changing jobs. I think the hangovers from the recession and people hunkering down is kind of recovering a little bit. I think people are just a little bit more comfortable changing jobs. And, that’s a plus. MODERATOR: Let me build on that. Is money the only driver or are there other drivers that factor into those decisions about moving from one firm to another? BELL: Millennials want flexibility and a culture that is conducive to that. Some firms have a rigid framework that doesn’t fit where they feel they need to be. PARKER: I think one of the things that we have going for us in this market is that this is a place that people want to live. I think that Atlanta, for a lot of reasons, is an attractive place. WILLMER: I think – and no offense to the big guys – that we’re seeing a lot of people coming from big firms who want the small firm experience. My perspective before was that maybe the day of the small firm was over with all the mergers and acquisitions that’s been going on. But, we have had people come to us and say we want the small firm experience and want to be someplace where it’s a little different. We’ve been getting some good, experienced candidates. GAMBINO: We have the opposite experience. We’re finding people leaving us to go to work for big firms because they can just blend in and be one of many in the firm; they don’t have to take on as much responsibility. HARRIS: It’s never one size fits all. We’re going to have folks that want the small firm experience. We’re going to have folks that want to work on the mega projects and be with the bigger firms. So, you really have to tailor it to the individual. BELL: And, I think we’re cautious. I mean, we learned through the recession not to ramp up like we did in 2005. And, so we’re looking for the talent, but we are not looking for 30 or 40 percent growth. WILLMER: You have to think and do very strategic things to attract Millennials. But, at the end of the day, if you give an engineer a good project, that’s what an engineer really wants. I think that’s true whether they are Millennials or Baby Boomers or Gen X. The comfort level with technology is different, but in terms of them wanting to succeed and be part of the group and loving to work on big projects, oh yeah – they’re a typical engineer. They have that same desire to do everything that you or I wanted to do. PARKER: My observation is the young folks that we get in are highly capable, highly motivated and ready for the workforce. Hiring people at the entry level tends to be the easier thing for us to do as compared to hiring someone who’s more seasoned for a specific opportunity. But, I think the other big challenge in finding talented people is the stability on the client side. You think about our clients – GDOT’s program is doubling while they have an ever-decreasing workforce. I think we all suspect that there may be a significant expansion of MARTA in the next few years. The BeltLine could have a huge transportation program building the light rail system. The Atlanta airport has an $8.5 billion capital program – the largest program that they’ve ever had there. They’re going to replace parking garages and build the single largest parking garage project in the world. They’re going to manage that and they’re going to look to our industry to help them deliver that. So, the question is, do these important public clients have the right people within their agencies to do all of these things and how do we as consultants and trusted advisors work with those agencies to help them be successful? Are we in alignment with what the leadership of those organizations are expecting of us? I think in some cases we’re not completely in alignment. MODERATOR: So, that’s a challenge and an opportunity? HARRIS: Yes. And one of the things we’re seeing at GDOT is they seem to be moving more and more towards the program management model, which 10 or 15 years ago was unheard of. But, again, because they don’t have the staff to manage their own programs, they’re outsourcing a lot of that. So, there are some opportunities. MODERATOR: I really appreciate each of you taking so much time out of your busy schedules to be with us here today. Thank you!
Published by American Council of Engineering Companies of Georgia. View All Articles.
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