AGC Chief Economist Ken Simonson is forecasting 4% to 8% growth for U.S. nonresidential construction in 2014, despite the fact that several key sectors are likely to remain flat from 2013 levels. Simonson offered a mostly upbeat assessment of the industry during an economic and regulatory issues luncheon on Wednesday at the 95th Annual Convention of the Associated General Contractors of America.
“This year, materials cost increases will be mild, but employment costs will spike more,” Simonson said. “There are many more reasons to be concerned about increasing employment costs.”
Simonson cites the 9.3% uptick in construction spending from January 2013 to January of this year, with double-digit increases in every major category other than public construction, which dipped 2.5% during that time.
He sees three “big positives” for the U.S. construction industry in the near future: a boost from the “shale gale,” which needs new infrastructure and sitework to support fracking and drilling activities; the expansion of the Panama Canal, which will drive improvements to U.S. ports, rail lines, tunnels and roads to support an increased volume of shipping; and the ongoing recovery of the residential market, which he says will “cool off” somewhat from 2013 levels but still remains robust.
Industry negatives, Simonson says, include a continuing reduction in government spending; a shift in the retail spending habits of Americans, with consumers buying fewer products in traditional brick-and-mortar stores and more online purchases; and a downsizing in the office-building sector, companies that require smaller office footprints for employees and more telecommuting. Simonson also sees industry workforce shortages increasing, up to as much as 49% below critical levels in some regions.
The other main event of the convention’s third day was the annual presentation of AGC’s Build America Awards. Included among the winners were three merit awards for Utah projects, including the Mountain View Corridor, and first-place honors for the UTA Airport TRAX Light Rail Extension in Salt Lake City (Stacy and Witbeck/Kiewit Western) and the Togwotee Trail Projects in northwest Wyoming (Oftedal Construction Inc.).
The association will install its new slate of officers as part of the convention closing ceremony on Thursday.
“This year, materials cost increases will be mild, but employment costs will spike more,” Simonson said. “There are many more reasons to be concerned about increasing employment costs.”
Simonson cites the 9.3% uptick in construction spending from January 2013 to January of this year, with double-digit increases in every major category other than public construction, which dipped 2.5% during that time.
He sees three “big positives” for the U.S. construction industry in the near future: a boost from the “shale gale,” which needs new infrastructure and sitework to support fracking and drilling activities; the expansion of the Panama Canal, which will drive improvements to U.S. ports, rail lines, tunnels and roads to support an increased volume of shipping; and the ongoing recovery of the residential market, which he says will “cool off” somewhat from 2013 levels but still remains robust.
Industry negatives, Simonson says, include a continuing reduction in government spending; a shift in the retail spending habits of Americans, with consumers buying fewer products in traditional brick-and-mortar stores and more online purchases; and a downsizing in the office-building sector, companies that require smaller office footprints for employees and more telecommuting. Simonson also sees industry workforce shortages increasing, up to as much as 49% below critical levels in some regions.
The other main event of the convention’s third day was the annual presentation of AGC’s Build America Awards. Included among the winners were three merit awards for Utah projects, including the Mountain View Corridor, and first-place honors for the UTA Airport TRAX Light Rail Extension in Salt Lake City (Stacy and Witbeck/Kiewit Western) and the Togwotee Trail Projects in northwest Wyoming (Oftedal Construction Inc.).
The association will install its new slate of officers as part of the convention closing ceremony on Thursday.
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