It’s a basic human instinct to compare how one person or business differs from another.
While this can sometimes be competitive in nature, it can also be a useful tool in understanding where opportunities for growth and change exist. It’s no secret that the cyclical nature of construction and the increasing shortage of labor are concerns for many. But there are other issues and trends presenting themselves for the construction industry. Earlier this year, the Associated General Contractors of America (AGC) published the 2017 Construction Hiring and Business Outlook Report. This report goes into detail about the challenges being faced by industry companies, emerging trends and even attitudes about the future. It offers excellent insight into where the construction industry is headed over the next 12 months. To help clients, prospects and others, Hanson & Co. has provided a summary of key points in the survey below.
Key Survey Information
There were 1,281 companies of varying sizes across the nation that participated in the survey. 34% of respondents were from companies with $10M or less in annual revenue, 22% between $10.1M and $30M in annual revenue, 10% between $30.1M and $50M in revenue and the balance with $50M or greater in annual revenue. 31% of respondents indicated they employ union labor most or all of time, while the remaining are exclusively open enterprises.
Key Survey Findings
- Biggest Concerns – Labor and related issues appear to be the prime concern for survey participants. 55% of respondents indicated that worker shortage is their biggest concern followed by increased competition, worker quality, rising labor costs and growth in federal regulations. Only 10% of respondents indicated that lack of public non-infrastructure work was a concern for their business.
- Financial Conditions – The ease of capital access is important for any large construction project. According to the survey results, very few companies are experiencing capital access problems. When asked, 62% of survey respondents indicated there has been no change in bank lending with regard to their company or customers. Only 4% of respondents indicated that their company has had a harder time getting loans or access to capital. However, increasing healthcare costs was identified as a top concern with an overwhelming 84% of respondents reporting an increase in cost over the prior year.
- Employment Trends – Access to labor has been a concern for many industry companies, and it appears that this trend will continue. When asked about changes in employment levels, 72% of respondents indicated they would be hiring additional employees, 21% of respondents will make no change and only 6% of respondents will decrease their number of employees. When asked about the ability to fill skilled positions, 44% of respondents indicated they are having a hard time filling salaried and skilled positions while 22% of respondents indicated some trouble filling skilled positions. Only 13% of respondents indicated they are having no trouble meeting hiring needs. When asked about future demands for labor, 75% of respondents indicated they expect to continue to have problems finding qualified construction professionals.
- Technology – Along with an overall increase in technology investment expected by 40% of respondents, the use of mobile technology to drive efficiencies will continue throughout 2017. When asked how the company plans to use mobile software, the top four priorities included making it easier to complete and submit daily reports, sharing of drawings, photos and documents, accessing customer and job information from the field and enhanced scheduling. In terms of IT security, 54% of respondents have a mobile security plan in place and 77% have a general IT security policy to prevent hacking and data breaches.
The survey reveals there is a strong market for construction and a very positive outlook for new business, but it’s plagued by difficultly with labor and rising healthcare expenses. It’s clear that as 2017 progresses, construction companies will need to find innovative ways to attract skilled labor to their projects. If you have questions about the survey findings or need assistance with a tax, audit or other financial issue, Hanson & Co. can help. For additional information please call us at (303) 388-1010, or click here to contact us. We look forward to speaking with you soon.