The Associated General Contractors of America (AGC) is optimistic in predicting an increase in hiring throughout 2015 as well as in the coming years. This is good news for contractors and for the construction industry as a whole, yet one crucial problem may inhibit the business outlook for many expanding companies. That problem is the shortage of skilled labors in the work force. Qualified craft workers, in particular, are increasingly difficult to find; and, according to the AGC, "Those shortages likely have much to do with the apparent poor quality of local craft worker training programs." Without adequate training programs in place, the quantity of skilled labor will likely continue to diminish; and, without developing said training programs, most companies are resorting to either overpaying their existing labor or implementing new technologies to give their laborers more time to focus on pertinent work.
According to an AGC survey of construction firms, 87 percent of respondents that were trying to hire workers reported having a difficult time filling key professional and craft positions. As one would expect, the result of the matter is pay increases and new benefits packages as the only means of retention. Over fifty percent of the surveyed firms reported having to increase base pay rates to retain construction professionals. About one out of every four firms reported improving benefits packages to accomplish the same goal. Even with the increased incentives, a large number of firms are still indicating losses of their workers to other industries, or to other firms who have offered even larger increases in base salary. These increases will make it more difficult for many firms to remain profitable, so changes will have to occur as soon as possible.
Fortunately for the industry, a Workforce Development Plan was released last year that "identified a series of steps federal, state and local officials should take to make it easier for schools, associations and firms to establish new career and technical education programs." Although the programs will be sure to help, it may take some time for them to be established and for them to work out some of the unavoidable kinks that come with new programs. In the meantime, almost eighty percent of surveyed firms reported that they plan to buy construction equipment this year, an increase of 5% from last year. While, eighty-one percent said they plan to lease new equipment this year, a decrease of 5% from last year. Even though the vast majority of firms are planning on making new purchases, over sixty-five percent of them said they will limit their new purchases to under $250,000.
As long as the firms are continuing to buy new products, the analysis will continue to indicate growth in the construction industry as a whole. And, having the problem of finding qualified workers is a much better problem than having to find qualified jobs. And, with sixty percent of surveyed workers indicating an optimism in growth, the industry as a whole should feel good about the future. The sixty percent is the highest recorded percentage in AGC’s Outlook series since it started in 2009, and the first time the survey has ever come back with over fifty percent reporting an expectation of market growth.
The report concludes that, "there is little doubt the construction industry will continue to recover in 2015. After several years of cautious expansion, many are deciding it is time to start hiring again. Beyond adding to the hours of their current staff, firms appear to have the confidence needed to bring on new workers – if they can find them. As firms expand their payrolls, they will invest in new equipment, pursue new market opportunities and embrace new and more efficient ways of doing business."