A recent industry survey of over 1,300 contractors in 49 states and the District of Columbia found that 79% of construction firms plan to expand with new hires in 2019. A similar percentage of firms, however, are concerned they will have difficulty selecting qualified workers. The survey, released January 2, 2019, was conducted by the Associated General Contractors of America (AGC) and Sage Construction and Real Estate.
The survey broke the industry down into 13 project categories, in which each section is expected to increase overall this year. Projects with the highest expectancy for construction growth are public buildings, highways, K-12 schools, and hospitals. Other areas of expected growth include federal government agencies, retail outlets, lodging facilities, and warehouses. Association officials continue to advocate new infrastructure investments as well as labor-saving technology and techniques to improve construction industry efficiency.
Different regions of the country emphasize different types of projects. Transportation projects are booming in the Northeast and West, while hospital construction is more prevalent in the Midwest. In the South, demand has been more for construction of retail, warehouses, and lodging.
Growing Labor Demand
Contractors will need to hire new employees in 2019 to meet the demand for new projects. This year’s finding that 79% of contractors are planning on expansion outpaces the previous year’s 75%. Only 7% of these firms, however, plan to expand employment by over 25%, while about 20% plan on keeping employment growth between 11 and 25%. Nearly half of contractors have put a limit on 10% employment growth.
The shortages in qualified labor must be resolved to avoid affecting construction costs and slowing down project schedules. These staffing issues and longer timetables can drive costs higher. Despite offering increased wages and bonuses, contractors have had a challenging time finding appropriate talent for their firms. Labor shortages are causing construction companies to rethink workload strategies to involve doing more work with less people.
Worker shortages are considered a bigger issue to at least a third of contractors than increased competition for projects. Contractors also worry about the health and safety of their employees.
A majority of builders, 63%, plan to increase training programs for new employees in 2019, which is a significant increase from 52% in 2018. Firms more likely to expand training are larger companies that earn $500 million or more in revenue annually. As far as IT staff training workers on technology, about a quarter of contractors report that their biggest challenge is finding the time to allow for training.
Many companies are looking into investment alternatives to hiring and training as they plan for a more technology=driven future. These companies are investing in robotics, drones, 3-D printers, leaner construction techniques and building information modeling. Contractors are generally optimistic about the demand for construction in 2019, as long as Washington officials work on necessary regulatory reforms and propose new infrastructure funding. Association leaders are looking for an infusion of new and qualified workers into an expanding industry.