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Construction industry climbs out of depression: An interview with Steve Malany

Steve Malany recently took on the presidency of the Associated General Contractors Oregon-Columbia Chapter. The organization, which currently has 870 member companies, advocates for the industry on issues such as workplace safety, labor, training, and legislation.

Malany earned a bachelor’s degree in construction engineering management at Oregon State in 1991 after earning a bachelor’s degree in architecture at the University of Idaho in 1988. “I realized I was more interested in the hands-on of construction than in design,” he said. “To me, it seemed more exciting.”

After graduating, Malany went straight to work as a project engineer for P&C Construction in Portland, Ore. He worked his way up the ladder and became a partner in the company in 2005.

P&C does most of its work in Oregon and has completed a wide range of construction projects, including schools, hospitals, churches, offices, warehouses, and historic renovations. The company carried out the 2010 remodel of Reed Lodge at Oregon State University.

Malany is an active Beaver alumnus who volunteers at Oregon State in various capacities, including serving on the School of Civil and Construction Engineering Industry Advisory Board. He keeps a framed poster of a jam-packed Reser Stadium on proud display in his office.

“I had a great experience at Oregon State,” he said. “Being able to continue giving a meaningful and well-rounded education to OSU’s next generation is very important to me.”

We recently picked Malany’s brain about how his company survived the economic downturn and the role education plays in assuring that we have a strong construction engineering workforce in the future.

You bought P&C at a tough time — just before the housing bubble burst and the economy crashed. How did the company survive?

The last five years have been the toughest. At the start of the downturn, we were working on a number of school construction projects, so that helped. But after that, it was a downward slope. We were dealing with reductions every nine months. That was hard, because we see our people as family. We had to make tough choices, but we had to keep the company going.

Before 2005, we were doing maybe 90 percent private construction. Last year, our work was 80 percent public, 20 percent private. That’s a huge shift. We had to adjust our mindset, because we were working more and more with government bureaucracy.

Today, we’re starting to bounce back. We’re seeing the architects hiring, and that’s always a bellwether for the construction industry, because it means that new projects are starting soon. Eventually, we’re hoping to even out to a 60/40 split of public and private. So we’re in the process of ramping up, hiring people in the office and out in the field, because we know the work is coming.

What do you see as the biggest challenge facing your industry today? 

We’re going to see major changes in our workforce over the next 10 to 15 years. The average age of our skilled workers is around 50 years old — baby boomers. About half our workforce will be retiring soon. That means it’s time to get the younger generation interested in careers in construction. We in the industry need to tell our story — that construction involves teamwork, really cool pieces of high-tech equipment, and rewarding careers with wages that will support your family.

Our big push with Associated General Contractors is career and technical education in high school. We want the tech and shop classes to come back. For the past two decades, those rooms have been sitting dormant or converted to other uses because there isn’t enough funding. There has been such a focus on making sure students go to college that we’ve missed out on a generation that could go into careers in construction or manufacturing.

High school is the perfect time to get students interested and involved with hands-on learning. The career and technical classes give them some experience so they can say, “Now I understand why I need to learn geometry — because I need to cut a truss.”

Last year the Oregon Legislature awarded $9 million in grants to revitalize career and technical education programs. They received $22 million in requests from school districts, so the demand is there. Going forward, we need to provide a sustained funding source.

What role does higher education play, and Oregon State in particular, in meeting the industry’s challenges?

I’d like to see every high school graduate, whether they’re going to go into the trades or to the community colleges, carry on their credits to the university if they decide they want to go on to get a degree in engineering. This requires more articulation between the high schools, community colleges, and universities. The new system we have in Oregon (the creation of a chief education officer and investment board responsible for the entire public education spectrum) is a good step.

When it comes to Oregon State, we know that the civil and construction engineering program is one of the best in the nation. Scott Ashford (head of the School of Civil and Construction Engineering and recently appointed dean of the College of Engineering) is doing a very good job of making sure they’ve got quality students coming through.

We know that OSU graduates are going to have the technical knowledge. What I’d like to see more of is an emphasis on the “soft” skills — being able to communicate. This is a very verbal industry. To be successful, you need to be able to write a memo and negotiate face to face.

What about increasing diversity as a way to grow the workforce?

Many people come into this industry based on family experience. Typically, they’ve had a relative in the industry. So it can be tough to get the younger generation from a minority community interested if they don’t have those role models. We’re trying to reach out into the minority communities and hire people who can be those role models going forward. But you can’t do that when you don’t have jobs. As the economy improves, we have an opportunity to pull together and expand our workforce through diversification. As industry leaders, we just need to stand up and say, “This is how it’s going to be.”

What does the future look like for the construction industry?

This isn’t a business where you can just say, “This is the way we’ve always done things, so let’s keep doing it that way.” I see more technology coming onto the worksite; more collaboration between developers, architects, and contractors on projects; a continued emphasis on sustainable construction. Most important, I see a steady climb out of the depression we went through. And what we went through in the construction industry was definitely a depression. We had a 40 percent unemployment rate at our worst, and about 20,000 workers left our industry. Over the next decade, we will need to replace over half of our workforce… That’s why growing the pipeline is so important.

— Romel Hernandez

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