ENR's CICI survey this quarter asked about the prospects of labor shortages in 2014. Of the executives polled, 47.9% said they expected labor shortages next year. Skilled craft labor is expected to be in shortest supply, with 40.9% of respondents expecting craft-labor shortfalls.
In other job categories, 24.4% expected shortfalls among project and construction managers, 17.1% expected shortages among architects and engineers, and 16.8% expected a need for estimators. Many executives commented that the recession had taken a toll on personnel, saying that middle managers and seasoned pros with five to 12 years of experience—the first ones to be laid off during the downturn—would be in short supply.
While CFMA members expressed concern about a tightening of credit markets cutting into project financing, CICI respondents said credit continues to be available. In the fourth quarter, 33% of CICI respondents said credit for project financing was easier than it was six months ago, while only 8.8% said credit was tighter. However, this is down from 39.1% in the third quarter.
"Banks had been unsure about the [Federal Reserve's] policy and future lending rates, so they have been less willing to make loans on long-term projects," says Anirban Basu, CEO of economic consultant Sage Policy Group Inc., Baltimore, and CFMA economic adviser.
However, Basu says the Fed's announcement, on Dec. 18, that it would gradually taper off its economic stimulus program, rather than sharply curtail it, coupled with a promise to maintain its "exceptionally low" lending rates, should boost banks' confidence and encourage them to lend on new projects.
A continuing concern is the level of public funding for projects. ENR asked survey respondents whether they believed federal project funding would increase, decrease or remain largely unchanged in 2014. Only 6.4% said they expected federal funding for construction to rise in 2014, while 37.7% believed it would fall by up to 5%, and another 21.6% believed it would decline by at least 5%.