Building costs expected to decline, though worries persist

STAN BULLARD

Construction business conditions are better but still nowhere near normal. That is the view of some Northeast Ohio building types that reinforces a just-released construction industry update by JLL Inc., the global realty firm with a Cleveland presence.

Dominic Ozanne, president of the Ozanne Construction Co. of Cleveland, said, “It’s the Wild West. Each job has its own difficulties. COVID-19 has changed everything. We don’t look at anything the same.”

Tim Lavelle, CEO of the Gorman-Lavelle plumbing and mechanical construction firm in Cleveland, said, “The fear factor is subsiding. I’ve not seen labor as tight in the construction business since the early 1980s, when the Perry nuclear plant was being built and was siphoning off labor from throughout the area.”

The JLL survey finds some reasons for an improving outlook. “The latter half of 2022 saw a prolonged decline in construction materials prices, winding down a period of overheated inflation and extreme volatility. The easing of supply chain issues for some categories and the end of the few remaining global COVID measures has returned a feeling of normal. However, ‘normal is proving to be complicated.’”

Ozanne said construction costs now demand separating material costs from labor costs, because labor supply is such a challenge for the industry.

By the numbers, JLL expects U.S. material costs to climb 3% to 5% in 2023 and labor cost for wages to increase 5% to 7%. at is quite a shift from the last word on 2022 U.S. price increases, which climbed 16% for materials and 6.2% for labor payrolls.

On a gross basis, combining both material and labor costs, JLL forecasts total construction costs in the U.S. climbing 4% to 6% this year. at

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Inc., a California-based startup that describes itself as the “leader in collection, analysis and distribution of real-time human data from on-body sensors and other sensing systems.” e company, created by CWRU alums Mark Gorski and Stan Mimoto, has raised $4.6 million in capital since its founding in 2015, according to Crunchbase. ink of the ADL as a university-hosted think tank. is a big switch from a 12% hike in 2022. e increase in mortgage interest rates has slowed down housing and car sales, so steel milled parts and lumber moderated. Steel milled products climbed 9% and lumber actually decreased 1%.

On the university side, the lab will be led by CWRU law professor Craig Nard, director of the school’s Spangenberg Center for Law, Technology & the Arts, which will house the ADL. Nard’s area of specialty is intellectual property with a focus on patent law.

Nard said the collaboration was formed as Gorski, a former agent with IMG, reached out to his alma mater about getting the law school involved with the myriad legal issues coming up in his company’s work.

However, price volatility will vary by products. e highest increase in 2022 over 2021 was 66% in diesel fuel prices, and copper and brass mill shapes increased 3% in the like period.

Meantime, low supply and long lead times on material deliveries continue, JLL said.

It will o cially launch this fall with a dozen students. e expectation is to bring a new cadre of CWRU students across various disciplines into the program each year to explore an array of topics.

“From the 30,000-foot level, this is about the legalities related to the collection, processing and monetization of personal data gathered from highend athletes,” Nard said. “And for the students on our end, this is a tremendous opportunity to create a leadership position around the legal landscape of the personal data ecosystem.” e information being collected by SD Labs could have a variety of applications for predicting behaviors and

Precisely what novel legal questions will be explored are to be determined.

But there is no shortage of starting points.

For example, how does one even de ne “personal data”? How does that break down on a jurisdictional basis? What legal matters could affect the processing of that data? Who is allowed to own or distribute this intrinsically personal information?

For his part, Ozanne said his company and others are buying materials well in advance, storing them in a warehouse or on-site until needed, and paying for them up front to avoid price hikes and ensure delivery. e environment has turned on its head the just-in-time desire for deliveries and spending that used to be the order of the day.

“And if the price goes up,” he added, “you won’t get the delivery until you agree to pay it.”

Concrete and cement availabilities for the coming year have not rmed up. George Palko, CEO and president of the heavy construction and energy contractor Great Lakes Construction, said it is too soon to tell if suppliers were able to build up supplies over the winter months, meaning the supply situation won’t clarify until well into the season. Last year, cement and concrete supplies went on an allocation system due to short supplies.

“Volume is too low in the winter months to know,” he said, though he noted the moderation in steel and lumber prices has been welcome.

A classic concern of construction contractors in Northeast Ohio, the availability of work, remains a non-issue here.

“I’m always impressed by the amount of multifamily work and other projects such as health care,” Lavelle said. “It’s created a real rush in the market.”

“I’m optimistic,” Ozanne said. “A lot of big projects are in the planning stages.”

Palko said he considers the market as opportunistic.

“We’re just starting to see the additional federal infrastructure spending cycle to the state and local levels,” Palko said.

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter mercial issues related to collection and use of athlete data on a global level and pioneering its real-world implementation,” said Gorski in a statement. “We are thrilled to partner with CWRU School of Law to share our learnings and leverage their resources in support of our mission to empower athletes to collect, control and monetize their personal data.” outcomes of players, plays, matches, possibly even entire games. It could bene t sports medicine, provide interesting stats for casual observers or generate predictive analytics that could give an advantage to competitors, teams or even gamblers.

“Personal data is on a path to become a monetizable digital asset — and in many cases a form of personal digital property — that can be used by an individual as consideration,” Mimoto added.

Such data could be a “tremendous asset,” Nard said, while emphasizing that SD Labs is “athlete centered.”

“ eir belief is the athlete should own this data and be able to monetize it,” he said. “(SD Labs) facilitates collection and analyzing of data and facilitates athletes in commercially exploiting this data.”

Students will create deep-dive research papers on these topics working with SD Labs and, potentially, its a liates, which range from sports organizations like the PGA Tour, brands like Bodyarmor and broadcasters like Fox Sports and CBS. e SD Labs website boasts that it had made available more than 750 hours of “real-time, in-game” human data content to broadcast partners across more than 150 countries.

“Stan and I have spent years navigating the legal, technical, and com-

“ e way in which your personal data is collected and used by organizations, however, is fragmented. Different states and countries have varying regulations and perspectives that govern the collection and use of personal data by individuals and third parties. is creates a signi cant opportunity for CWRU and SD Labs to not only provide the leading legal analysis related to collection, use and ownership of personal data across all regions globally, but to become the global thought leader on this topic.”

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

NEW LEADER: FirstEnergy has a new CEO with decades of experience in the utilities industry and a couple of years’ experience at one of the nation’s leading asset management rms. e company announced Monday, March 27, that it has appointed Brian X. Tierney to the post. Tierney, 55, is a senior managing director and global head of infrastructure operations and asset management at Blackstone’s infrastructure division. Blackstone became a major FirstEnergy shareholder at the end of 2021, when it purchased $1 billion in FirstEnergy stock in the wake of the House Bill 6 bribery scandal.

GET OUT OF TOWN: Frontier Airlines plans to launch new seasonal nonstop ights connecting Cleveland Hopkins International Airport (CLE) to San Francisco, Dallas-Fort Worth, San Diego and Charlotte. e ights to and from Dallas-Fort Worth (DFW) and Charlotte (CLT) are set to begin May 12 and will be o ered four times a week. Flights to and from San Francisco (SFO) and San Diego (SAN) will run three times a week and are set to begin June 23. With the new service, Frontier will serve a total of 17 nonstop destinations from Cleveland, the most of any airline operating from Hopkins.

OUTSTANDING RECOGNITION:

Brandon Chrostowski of EDWINS is among the nalists in the Outstanding Restaurateur category for the