Study: Contractors Optimistic on 2019 Growth, Concerned About Workforce

By Timothy Johnson | Jan 3, 2019




According to a recent study conducted by the Associated General Contractors of America (AGC) and Sage Construction and Real Estate, 79 percent of construction firms expect to hire more employees in 2019. However, 78 percent of the study's respondents report trouble finding qualified workers.

The study, "Contractors Remain Confident About Demand, Worried About Labor Supply: The 2019 Construction Hiring and Business Outlook Report," is an assessment of contractors' outlook on 2019. AGC CEO Stephen E. Sandherr said the study finds contractors are optimistic about industry growth but concerned about finding qualified workers to meet new demand.

The survey measures 13 categories of projects, and in all of them, more respondents expect their market to expand than those who expect it to contract. The results measure a net reading between those who expect growth and those who do not. Public building construction came in the highest at 17 percent net positive. Power construction showed a 10-percent net positive result. Multifamily construction, which came in at 5 percent, was the lowest. The AGC said multifamily construction may have outpaced demand in some areas.

However, workforce development issues loom. Despite four out of five respondents expecting growth, almost the same number expect trouble hiring to meet that demand. The AGC said this shortage may stunt growth, most notably raising construction costs and elongating project schedules. The study found 37 percent of contractors are preparing for the shortfall by bidding and contracting at higher rates.

The survey found, to cope with the workforce shortage, construction firms are raising pay, providing bonuses, and increasing benefits in an attempt to make construction work more appealing. Moreover, 63 percent of contractors are investing in training programs.

In the electrical construction industry, organizations such as the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW) are doing their part to support electrical contractors in acquiring skilled labor.

According to Geary Higgins, vice president of labor relations at NECA, the electrical industry needs over 10,000 new entrants every year to meet future labor demands.

“Our local areas are reaching out to untapped areas, recruiting women, minorities, and veterans every chance we get," Higgins said. "The national offices of NECA and the IBEW are sponsoring job fairs around the country every week, and supporting non-traditional efforts to promote the industry, and are putting people to work.  We have over 250 electrical apprenticeship programs, which are providing $50,000 scholarships for those qualified to enter. We have a wonderful career opportunity available for those that want it, and we are getting the word out.”

Beyond incentives and outreach, however, Ken Simonson, the AGC's chief economist, said contractors reported investing in labor-saving technologies, such as building information modeling, robotics, drones, and 3-D printers. About one-third of respondents (32 percent) said their companies are using methods to reduce on-site work time. This includes lean construction methods and prefabrication.

The study also asked about contractors' IT plans. According to Sage, 42 percent of contractors will invest in this area. Almost one-third (30 percent) will invest in project and document management software, and contractors appear to be getting more comfortable with data management in the cloud. A substantial number of respondents (26 percent) noted difficulty finding time to implement and train on new software technology.

For more results from the survey, click here.

About The Author

Timothy Johnson is the former digital editor for ELECTRICAL CONTRACTOR magazine.

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