After several tough, tough years, the Milwaukee construction industry is poised for continued growth in 2015. A recent American Institute of Architects survey reported that architects in the Midwest experienced five months of solid billing growth between May 2014 and September 2014, which is considered a 9-12 month leading indicator for actual construction.

1. Construction Industry
Expected to Grow in 2015
5 Areas to Watch in Metro Milwaukee
By Bart Adams, CPA, Partner
Construction Industry Expected to Grow in 2015. Copyright 2015, Sikich LLP. 1
After several tough, tough years, the Milwaukee construction industry is poised for continued
growth in 2015. A recent American Institute of Architects survey reported that architects in the
Midwest experienced five months of solid billing growth between May 2014 and September 2014,
which is considered a 9-12 month leading indicator for actual construction.
With manufacturing activity on the rise, a shift in residential choices among millennials, some
material shortages and a growing construction labor force shortage, the industry’s landscape will
look quite different than it did in 2014.
Based on my conversations with Milwaukee area firms across multiple subsectors, including
residential, office, infrastructure and industrial, here are five areas to watch this year:
1. Demand increases for quality industrial space
While industrial vacancy rates remain low, there is pent-up demand for quality industrial
space. Along with increases in manufacturing activity, we’re seeing more new industrial
speculative buildings, industrial parks and add-ons in the works, including HellermannTyton’s
102,000-square-foot addition to its 92,000-square-foot facility in Milwaukee, Uline’s
1,000,000-square-foot warehouse and 200,000-square-foot office in Pleasant Prairie, and the
construction of a 100,000-square-foot facility in Waukesha to support the continued growth of
companies like EmbedTek. Industrial construction shows no sign of stopping in 2015.
2. Rise in multi-family housing
The face of the housing market continues to change as millennials along with empty-nesters
move more frequently and demand residential flexibility. In the case of millennials, they often
live at their parents’ house for a longer period of time until their student loans become more
manageable. As a result, multi-family housing should increase briefly in 2015 and then begin to
settle down as we approach the end of the year. Single-family home construction will continue to
show improvement in 2015 from the depths of the recession but will likely not see pre-recession
boom-time construction levels in the near term.
3. Infrastructure remains steady
The Zoo Interchange project, an ongoing infrastructure renovation project that will drastically
improve critical Milwaukee roadways, is valued at $1.7 billion and currently represents the largest
project in the state’s history. The core reconstruction will begin in 2015 and continue until 2017,

2. Construction Industry Expected to Grow in 2015. Copyright 2015, Sikich LLP.
with the last piece of the project on the north leg scheduled to be completed in 2018. Other
significant infrastructure construction includes the continuation of the I-94 North-South project
over the next seven years and the upcoming I-94 East-West Corridor project that’s valued at
approximately $1 billion. Overall, we will see consistent activity in infrastructure construction, but
no major growth or decline.
4. Office space projects continue at a healthy rate
Multiple office space construction projects broke ground in the summer of 2014. The 1.1 million-
square-foot Northwestern Mutual Tower will be completed in 2017, permanently changing
the Milwaukee skyline. The new building should help create 1,900 new jobs by 2030, and
Northwestern Mutual plans to invest roughly $450 million for both the design and construction.
The Irgens 833 East Michigan project will result in a 17-story office building with 350,000-square-
feet of Class A space that will house tenants such as Godfrey & Kahn, Cresa Milwaukee, Colliers
International/Wisconsin and Jason Inc. Occupants should move in by February 2016. Across the
board, demand for office space will continue at a steady rate.
5. Shortage of skilled workers poses problems
As construction increases, the need for skilled workers increases as well. According to a study
by the Associated General Contractors of America, the Milwaukee, Waukesha and West Allis
areas saw an increase of approximately 8 percent employment—2,100 construction jobs—
between September 2013 and September 2014. However, many local construction firms found
it challenging to fill positions. As high schools focus less on applied technical skills and students
pursue higher-paying careers outside of the trades, executives in the industry worry about
replacing the aging skilled workforce and identifying who will lead the industry forward.
Construction in the Metro Milwaukee area will grow in 2015, but finding qualified talent to
complete a variety of specialized projects will become increasingly difficult. As new projects kick
off, firms will be more selective in their bidding processes since they need to identify how to
complete existing projects with a rapidly diminishing talent pool. This could potentially reduce the
number of bidders.
The ongoing infrastructure and office space projects combined with the increase in multi-family
housing and industrial construction will create numerous opportunities for business expansion
and job growth in the Milwaukee area. To capitalize on this, it’s clear the greatest challenge lies
in training the next generation of construction workers. This plays a critical role in accelerating
growth in Milwaukee and building a strong, vibrant community for decades to come.
Bart Adams, CPA
262.754.9400
badams@sikich.com