The Associated General Contractors of America released its 2019 construction outlook survey on Wednesday, which illustrated the greatest challenge for contractors is finding qualified workers, as low unemployment pushes employers to fork over higher wages and better benefits.
Seventy-nine percent of construction firms plan to expand their payrolls in 2019, but an almost equal percentage are worried about their ability to locate and hire qualified workers, according to the survey.
The findings are detailed in Contractors Remain Confident About Demand, Worried About Labor Supply: The 2019 Construction Hiring and Business Outlook Report.
Stephen E. Sandherr, the association’s chief executive officer, said, “Construction executives appear to remain confident about their market prospects for 2019 and plan to add headcount to cope with the added workload.” He added, “Even as they are optimistic about growing demand, contractors are concerned about finding qualified workers to execute projects.”
As reported in the Detroit News, Ken Simonson, chief economist for the organization said news that General Motors Co. is planning to idle five plants this year will likely decrease demand from suppliers and other manufacturers for construction projects.
For 45 percent of Michigan firms, the worker shortage is their biggest concern, leading to challenges with inexperienced staff and safety concerns. Staffing challenges, they said, also have increased costs and bids and lengthened project timelines.
As a result, 62 percent of firms said they increased base pay rates, 45 percent said they provided bonuses and 14 percent said they improved benefit contributions in 2018. In 2019, 65 percent of firms said they would invest more in training and worker development and 33 percent said they would increase their investment in human resources software.
For federal construction projects, the report adds, 10 percent of firms predicted more opportunities will be available, while 87 percent expect them to stay the same. The survey, however, was collected prior to the U.S. government shutdown that began on Dec. 22.
A prolonged shutdown, however, could hurt contractors who rely on federal construction, which represents a small portion of the market and delay permitting processes from federal agencies.