The Road Ahead: Turning Market Challenges into Strategic Advantage

Photo of CEO, Jed Richard in his office

Make no mistake—we are navigating a defining moment in construction. While others see obstacles, I see a landscape ripe with opportunity for firms that execute with precision and adapt with purpose. Let me be clear about what we're facing and exactly how Richard is positioned to thrive.

The Numbers Don't Lie: Finding Strength in Data

The latest Census Bureau data confirms what we're seeing on the ground in Chicago and across the U.S.: construction spending reached $2.2 trillion in February 2025—a 3% increase from 2024 levels. Private construction spending, at $1.7 trillion, dominates the market with transportation projects currently leading growth. As one of Chicago's premier general contractors, we're closely tracking other sectors making year-to-date gains—office, power, recreation, and communications are all showing modest but promising increases. While transportation leads today, I'm particularly focused on manufacturing construction, which is up nearly 5% year-to-date. With new tariffs in place, we're positioned at the beginning of what I believe will be a significant reshoring wave as companies bring production back to American soil. This manufacturing renaissance isn't on the horizon—it's already underway, and will drive Chicago construction demand for years to come as companies rush to establish domestic production facilities across the Midwest.

What matters isn't just that overall spending is up—it's where that money is flowing. While private sector growth drives much of our industry, public construction spending reached $509.3 billion, with healthcare facilities showing particular strength with nearly 12% growth year to date as federal agencies reinvest in critical medical infrastructure. The healthcare construction sector's resilience stems from demographic trends and technological advancements that require specialized facilities—projects perfectly aligned with Richard's expertise in complex, compliance-driven environments. These aren't just statistics—they're validation of what we've been strategically positioning for, in a sector that contributes 4.5% to America's GDP and employs 8.2 million workers. When we execute with precision, we're not just building structures—we're literally building the economic backbone of our nation.

Turning Federal Constraints into Competitive Advantage

Tariffs, inflation, and rigid funding structures have created unprecedented pressure on federal construction projects. The Department of Government Efficiency (DOGE) initiative has sent shockwaves through the contracting community as agencies struggle to implement aggressive metrics with limited resources.

I refuse to join the chorus of complaint about these constraints. Instead, I've positioned Richard to leverage them. Having delivered complex projects under stringent government requirements for a decade, we've mastered the art of efficiency within rigorous frameworks.

This expertise becomes invaluable as federal agencies shift from broad budget cuts to surgical efficiency improvements. While other contractors retreat from government work, we're leaning in—offering solutions that help agencies meet their mandates while maintaining project integrity. This isn't idealism; it's strategic positioning in a market segment others find too challenging to navigate.

Strategic Focus on Defense, VA, and Healthcare

I've deliberately concentrated our federal portfolio on departments with stable funding trajectories. The Department of Defense isn't experiencing the dramatic cuts seen elsewhere, making our extensive DOD partnerships a source of stability. Similarly, our commitment to Veterans Affairs and federal healthcare projects continues to anchor our government business.

Healthcare construction, which continues to show remarkable resilience in the latest Census data, represents a critical component of our strategy. Federal healthcare facilities demand the precise blend of technical expertise, compliance management, and operational sensitivity that distinguishes Richard from less specialized competitors. Our healthcare teams understand that these aren't just buildings—they're healing environments where design and construction directly impact patient outcomes.

These relationships weren't built overnight—they're the result of consistent performance and earned trust. While others chase whatever work is available, we're doubling down on sectors where our expertise creates tangible value and our reputation opens doors.

Confronting the America First Reality

The "America First" movement is driving significant reshoring of manufacturing and infrastructure investment. This creates tremendous opportunity, but let's be brutally honest about the challenge: we reached peak availability of trained craft professionals in 2021-2022. Combined with restrictive immigration policies that constrain our multinational workforce, we're seeing cost escalation and schedule pressure across the industry.

I've implemented four specific strategies to address these realities:

1. Rigorous Subcontractor Qualification

We've completely transformed our subcontractor underwriting process, evaluating not just financial stability but operational capacity, quality systems, and workforce depth. This isn't bureaucracy—it's risk management that prevents project disruption before it starts. When others are scrambling to find replacement subcontractors mid-project, we're executing without interruption.

2. Technology Simplification

I've seen too many firms chase technology for technology's sake. At Richard, we've deliberately streamlined our tech stack to eliminate friction and provide actionable intelligence to our field teams. We've moved from 30-day lagging indicators to same-day insights through OpenAPI-driven reporting, giving our project leaders the information they need to make decisive corrections before small issues become major problems.

3. Non-Negotiable Safety Leadership

Safety isn't a program at Richard—it's our identity. We launched our monthly Safety Steering Committee, mandated advanced Studson helmets for every team member, and commissioned internal safety videos that reinforce our culture from the inside out. The result isn't just compliance—it's a workforce that returns home safely every day and delivers quality without compromise.

4. Policy Advocacy with Purpose

I'm pushing aggressively for raising the small business threshold in federal contracting from $45 million to $150 million. This isn't self-interest—it's about creating space for growing firms to compete meaningfully in larger markets and fostering a more diverse contractor ecosystem. The construction industry thrives on competition, and policy adjustments that promote access create a stronger sector for everyone.

Translating Government Discipline to Private Sector Advantage

As we strategically expand our private sector portfolio, we're weaponizing the discipline and efficiency we've developed through government work. The stringent requirements of federal contracting have forced us to optimize processes and eliminate waste—capabilities that create immediate competitive advantage in commercial projects.

This isn't about abandoning our government expertise—it's about applying those specialized skills across a broader portfolio to drive growth and diversification. When private clients experience the precision planning and execution that federal work demands, they recognize the difference immediately.

Execution Over Empty Innovation

In this market, we're not distracted by shiny objects. Our focus remains relentlessly on execution—making clear-eyed decisions that hold up under pressure and delivering results regardless of external challenges.

This execution-first approach is particularly critical in manufacturing construction, where schedule compression, specialized systems integration, and compliance requirements create layers of complexity that only the most disciplined contractors can navigate successfully. Manufacturing construction isn't just about volume—it's about delivering sophisticated facilities that meet exacting standards for technology integration, process flow, and operational efficiency.

Preconstruction has become absolutely critical, requiring us to secure specialty contractors earlier and manage supply chain volatility with unprecedented vigilance. Our teams operate like traders on the floor, monitoring material costs and labor availability in real-time to protect project viability.

Leading Through Volatility

As material costs fluctuate and labor premiums rise, we're seeing mega-projects in major metros drawing critical resources from the broader market. This volatility will extend through 2025 and beyond, especially without policy adjustments that address our workforce challenges.

The Census Bureau's data showing 2.1% overall construction growth during the first two months of 2025 compared to 2024 confirms my conviction: despite significant headwinds, our industry continues to expand. The firms that thrive won't be the largest or the most innovative—they'll be the ones that execute with discipline and adapt with purpose.

I've aligned our field metrics with operational standards, consolidated management platforms, and created real-time dashboards that make success visible and actionable. These investments in operational clarity empower our teams to make confident decisions in uncertain circumstances.

The Path Forward Is Clear

Construction has always been complex—but complexity is our competitive advantage. By focusing on fundamentals, maintaining discipline in our processes, and leveraging our unique expertise across market sectors, we're building resilience that will carry our clients and stakeholders through this volatile period and well beyond.

The challenges we face aren't obstacles—they're opportunities to demonstrate what sets Richard apart. We'll continue to adapt, execute, and make decisions that hold up under pressure, bringing unwavering commitment to excellence to every project regardless of size, sector, or complexity.

Our industry's economic impact—contributing 4.5% to America's GDP and employing 8.2 million workers—underscores the significance of what we do. For instance, when we complete healthcare projects with exceptional quality, we're directly enhancing the medical infrastructure that serves our communities. This isn't just business—it's nation building in its most literal sense.

This isn't just confidence—it's conviction born from a decade of delivering results when others couldn't. In a market defined by uncertainty, that's exactly what our clients need.

Jed Richard
CEO