Contractors Anticipate More Work in 2017 and Continued Labor Challenges

A positive outlook was reported in all market segments except for the multifamily residential sector where contractors were less optimistic.

A recent report released by the Associated General Contractors of America and Sage Construction and Real Estate indicates that 73 percent of construction firms plan to expand headcount with a strong demand expected from both public and private sectors. The report, Expecting a Post-Election Bump: The 2017 Construction Industry Hiring and Business Outlook, stated that despite the positive outlook, many firms have concerns about the availability of skilled labor and the rising health and regulatory costs.

The association’s CEO Stephen E. Sandherr explained, “Contractors have relatively high expectations for 2017 as they predict the economy and demands for all types of construction will grow. As a result of this optimism, many firms expect to expand their headcount next year.”

A press release issued by the association states that contractors had a positive outlook, on net, for all 13 market segments included in the survey. Respondents are most optimistic about the outlook for both the hospital and retail, warehouse and lodging markets (23 percent net positive for both).  Respondents were also positive about the outlook for private office (20 percent net positive), manufacturing (18 percent), highway (15 percent) and public building construction (15 percent) construction. And they are optimistic about the prospects for higher education construction (14 percent), K-12 school construction (14 percent) construction and water and sewer construction (14 percent).

The only market segment where contractors are less optimistic this year than they were last year is the multifamily residential sector, where there is an 11 percent net positive for the year vs. a 14 percent net positive last year. It is important to note, however, that most respondents completed this survey in the days and weeks following the elections and may have based some of their optimism on the recent growth in stock market values and the fact the president-elect has repeatedly promised to make new investments in infrastructure, association officials noted.

See state-specific results and download the report here.