AGC survey shows construction firms expect to see demand for services grow in 2020

Dec. 23, 2019

Many firms worry about finding qualified workers to hire, expecting longer project completion times

According to survey results from the Associated General Contractors of America (AGC), most construction firms are expecting to see demand for their services and hiring to grow 2020.

The survey—which AGC conducted along with Sage Construction and Real Estate—also found that despite the expectation for higher demand, many of these firms are worried about the ability to find qualified workers to hire. The findings are documented in Strong Demand for Work Amid Stronger Demand for Workers: The 2020 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 segment, between 27% and 36% of respondents expect an increase compared to 2019 in the dollar value of projects they compete for. Meanwhile, between 11% and 21% of respondents foresee less work available in 2020.

According to AGC, bridge and highway construction scored a net positive reading of 20%, as did transportation (transit, rail & airport) construction.

The survey found that 75% of firms plan to increase their employee count this year, similar to the 77% with this expectation at the start of 2019 and 75% at the start of 2018. However, just over half of firms (52%) report their expansion plans will only increase the size of their firm by 10% or less. About one-fifth (19%) of respondents plan to increase headcount by 11% to 25%. Only 5% of respondents plan to increase employment by more than 25%.

Despite firms’ plans to expand headcount, 81% report they are having a hard time filling salaried and hourly craft positions. In addition, 43% expect it will continue to be hard to hire in the next 12 months and 22% expect that it will become harder to hire in 2020. The survey results also indicated that labor shortages are having an impact on construction costs and project schedules, as 44% of respondents reported that staffing challenges drove costs higher than anticipated. In response, 41% of firms are putting higher prices into new bids and contracts. Similarly, 40% report projects have taken longer than they anticipated and 23% report putting longer completion times into their bids or contracts.

Construction firms are also investing more in training programs for current and new workers, association officials noted, as 42% of firms report they revamped initiatives to recruit labor last year, 32% of firms report they have increased funding for technical education programs, and 29% have restructured or changed programming for current skilled labor recruits.


SOURCE: Associated General Contractors of America

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