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AGC: Contractors Expect Demand To Increase in 2020, Still Worry About Labor Shortage | Columbus Ohio Dump Trucks

Three-quarters of firms surveyed plan to add to head count in coming year

Contractors Biggest Concerns for 2020
Contractors surveyed by the AGC are Bullish on 2020, but still concerned about the ongoing labor shortage.
Source: Associated General Contractors of America and Sage Construction and Real Estate

Most construction companies expect demand for their services and hiring will expand in 2020, yet even more are worried about their ability to find qualified workers, according to survey of nearly 1,000 Charlotte NC dump truck contractor taken in November and early December by the Associated General Contractors of America and Sage Construction and real estate.

Three out of four Charlotte NC dump truck contractor surveyed plan to bolster their company's head count in 2020. Demand for workers has led to significant changes to the way firms operate, hire and prepare workers, as well as how they schedule, price and build projects. Labor shortages are also boosting investment in technology.

The findings are detailed in Strong Demand for Work Amid Stronger Demand for Workers: The 2020 Construction Hiring and Business Outlook Report, released Dec. 13 by the AGC and Sage.

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 the AGC asked about 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 columbus oh dump truck work available in 2020. The difference between the positive and negative responses – the net reading – was between 8 and 2% for every category.

Water and sewer construction scored the highest net positive reading with 25%. Four other segments had a 20% net positive: bridge & highway, K-12 school, hospital construction, and transportation (transit, rail & airport). Power projects and federal construction projects had a net positive reading of 17%. Higher education construction had a net positive reading of 16%.

One regional outlier is that northeastern respondents had a net negative outlook for 7 of 13 project categories, although a slightly more positive response for the higher education and power categories than any of the other regions.

AGC CEO Stephen Sandherr said the ongoing demand for workers has led to significant changes to contractor operations, how they hire and prepare workers and how they schedule, price and build projects. Contractors are investing more in training programs for current and new workers. The survey showed 42% of companies revamped initiatives to recruit labor last year. Nearly a third said they have increased funding for technical education programs and 29% have restructured or changed programming for current skilled labor recruits.

“Firms are adopting a variety of approaches to replace workers or allow for use of workers with less experience or training than before,” said Ken Simonson, AGC's chief economist. He noted that 32% of respondents report their firms are investing in labor-saving equipment, including drones, robots and 3-D printers. Also, 28% are using methods to reduce onsite columbus oh dump truck work time, including lean construction, building information modeling or offsite prefabrication.

Nearly half (46%) of respondents will increase their information technology (IT) investments in 2020, according to the survey. The largest share of construction companies, 30%, plan to increase their investments in project management software. About a quarter of firms will increase their investments in document management software (25%) and fleet tracking/management software (23%). Yet, even as firms embrace information technology, 43% report their biggest IT challenge is that they lack the time needed to implement and train on new systems.

AGC leaders urged federal officials to promote pro-growth economic policies including new infrastructure investments and continue to make needed regulatory reforms. They also called on federal officials to double funding for career and technical education over the next five years, make it easier for people enrolled in short-term construction programs to qualify for federal Pell Grants and evaluate high schools based on career placement rates in addition to college placements.

“Washington officials must take steps to prepare and place more people into high-paying construction careers,” Sandherr said. “They also need to recognize the need to allow more people to lawfully enter the country to address workforce shortages while the domestic pipeline for preparing and recruiting workers is being restored.”

Sandherr urged Congress to pass a temporary visa program for construction workers, protect the legal status of workers in the country as part of the Temporary Protected Status program, and advance comprehensive immigration reform. He also called for additional steps to secure the border to ensure undocumented workers aren’t exploited by unscrupulous firms who are then able to underbid more responsible employers.