The nation’s contractors expressed a surprisingly optimistic view of the industry’s prospects for 2018 in a recent outlook survey conducted by the Associated General Contractors of America and Sage Construction and Real Estate.

More than 44% of respondents said they expect demand for construction services to grow this year, the highest percentage increase ever recorded in the association’s outlook series. The survey gathered responses from more than 1,000 firms in 49 states and Washington, D.C.

The strongest expectations for growth included net increases in markets such as offices, expected to grow 22%; transportation and retail, and warehouse and lodging, up 21%; water and sewer projects, up 20%; K-12 construction, up 18%; and highway and hospitality, up 17%.

“Construction firms appear to be very optimistic about 2018 as they expect demand for all types of construction services to continue to expand,” said AGC CEO Stephen E. Sandherr, in a media call that accompanied the survey release.

Survey respondents were only slightly less optimistic about growth in other sectors, including a 16% surge for both multifamily and public buildings, power construction up by 13%, higher education projects up 11% and an 8% increase in federal projects.

“The real surprise in this year’s survey wasn’t the optimism, because contractors are a pretty optimistic group,” AGC spokesman Brian Turmail told ENR, “but in how optimistic they are. We think they may be looking at current workloads and expecting those to continue, but many economists, including ours here at AGC, don’t see that happening.”

Sandherr added that “this optimism is likely based on current economic conditions, an increasingly business-friendly regulatory environment and expectations that the Trump administration will boost infrastructure investments.”

But those factors, especially infrastructure funding at the federal level, are far from certain. “Infrastructure seems to be a bigger priority for the [Trump] administration than for Congress,” Turmail says.

The outlook offered familiar results about workforce issues. Seventy-five percent of firms say they will increase head counts this year, up from 73% last year. However, half the contractor respondents reported that expansion plans will increase the size of their firms by 10% or less.

In addition, 82% of firms expect that recruiting and hiring workers will be more difficult this year. That’s up from 76% in 2017. Nearly 78% report difficulty finding qualified workers to hire, up from 73% last year.