Contractors See Bright 2019, But Finding Workers Is Still Tough
Construction contractors are upbeat about their businesses’ outlook for 2019 and expect to increase staffing, but they remain worried about recruiting enough workers to meet their needs, a new industry survey says.
The Associated General Contractors of America-Sage Construction and Real Estate survey, whose results were announced on Jan. 2, shows that more contractors foresee all market segments the survey covered increasing than declining, said Stephen Sandherr, AGC's chief executive officer.
In addition, 79% of the more than 1,300 firms that responded to the AGC-Sage survey plan to expand their workforce in 2019, though 49% of those responding say that they will only increase their total workforce by 10% or less.
Moreover, 78% of those filing responses say they are having difficulties in attracting salaried and hourly craft jobs. Moreover, 26% say it will be more difficult to bring workers on board this year.
To attract new staff, 59% of the firms say they boosted base pay rates, 29% gave bonuses or provided other incentives and 24% sweetened employee benefits.
Almost one-third of survey respondents say they are using a variety of techniques to replace workers or use workers who have less training than those in previous years. The techniques include lean construction, building information modeling (BIM) or offsite fabrication of project components.
In addition, 42% of firms responding to the survey said they plan to increase spending on information technology, including project-management and document-management software.
Despite the contractors' positive views, some clouds may appear in coming months.
Sandherr noted that the survey responses were submitted from November through December 17—before the partial federal government shutdown hit on Dec. 22 and President Trump announced a hold on tariffs against certain imports from China.
Sandherr said that although contractors hope Congress can pass new infrastructure legislation this year, “if federal officials can’t find a way to enact new infrastructure funding, many contractors’ more optimistic expectations will not be met.”
Moreover, he said he’s not optimistic that Congress will reauthorize federal highway and transit programs this year. Sandherr observed that Congress tends not to act until faced with a “hard and fast deadline” and the current highway-transit measure won’t lapse until September of next year.
Capitol Hill will see hearings on surface transportation legislation this year, he predicted, but added, “The real action will likely occur in 2020.”
And if the U.S. and China can’t strike a trade deal, Sandherr said, “Many contractors will be squeezed by growing costs for materials at a time when an expanded trade war will likely undermine private-sector demand for construction.”