Survey results released by the Associated General Contractors of America and Sage Construction and Real Estate show that although 79 percent of construction firms plan to expand their payrolls in 2019, an almost equal percentage are concerned regarding their ability to locate and hire qualified workers, according to www.agc.org. The survey findings are detailed in Contractors Remain Confident About Demand, Worried About Labor Supply: The 2019 Construction Hiring and Business Outlook Report.
The percentage of respondents who expect a market segment to expand exceeds the percentage who expect it to contract for all 13 categories of projects included in the survey. For every market segment, between 23 and 32 percent of respondents expect the dollar volume of projects they compete for to increase. For all but one segment, between 11 and 16 percent of respondents predict less work available in 2019.
Most contractors plan to hire in 2019 to keep pace with growing demand. Seventy-nine percent plan to increase headcount this year—up from 75 percent at the start of 2018 and 73 percent at the start of 2017. However, just under half of firms report their expansion plans will only increase the size of their firm by 10 percent or less. About one-fifth of respondents plan to increase headcount by 11 to 25 percent, and only 7 percent of respondents plan to increase employment by more than 25 percent.
However, 78 percent of respondents report they are having difficulty filling salaried and hourly craft positions—down slightly from 83 percent at the start of 2018. In addition, 42 percent expect to continue to have hiring difficulties during the next 12 months, and 26 percent expect it will become more difficult to hire in 2019.
Labor shortages are affecting construction costs and project schedules. One-third of respondents report staffing challenges drove costs higher than anticipated, and as a result, 37 percent of firms are putting higher prices into new bids and contracts. Additionally, 34 percent report projects have taken longer than they anticipated.
The labor shortage has prompted employers to increase pay and provide bonuses and benefits. Fifty-nine percent of firms increased base pay rates; 29 percent provided incentives and/or bonuses; and 24 percent of firms increased contributions or improved employee benefits.
The survey shows more investment in training programs for current and new workers. Sixty-three percent of firms plan to increase investments in training and development in 2019, which is up from 52 percent at the beginning of 2018. Seventy-one percent of companies with more than $500 million in revenue plan to increase investments in training compared with 59 percent of firms with $50 million or less in revenue.
Thirty-two percent of respondents report their firms are using methods to reduce onsite worktime, including lean construction, virtual construction techniques or offsite prefabrication. Twenty-eight percent are investing in labor-saving equipment such as drones, robots and 3-D printers, and 42 percent plan to increase their IT investments in 2019.
Association officials noted that despite political partisanship and trade disputes, contractors are optimistic about demand for construction services in 2019. However, they noted the outlook is based on responses provided before the recent partial federal government shutdown and at a time when President Trump had announced a halt to pending tariffs on a wide range of Chinese goods.
The outlook was based on survey results from more than 1,300 firms from 49 states and Washington, D.C.
