All Articles Finance Contractors optimistic about 2016 construction outlook

Contractors optimistic about 2016 construction outlook

2 min read


The Associated Contractors of America released their 2016 Construction Hiring and Business Outlook Report today, and the results were fairly optimistic although the majority of respondents expect about the same dollar volume of projects they compete for this year to be in line with last year. That said, 63% of the more than 1,500 firms from around the country who participated in the survey indicate they’ll increase their workforce by up to 25%, while only 6% see layoffs on the horizon. In addition, many will up their investment in information technology.

Where the work is expected

Most companies are optimistic about construction opportunities in the retail, warehouse and lodging, health care, office, higher education and multifamily sectors and believe there will be more manufacturing and power-plant construction than there has been in sometime.

Looming challenges

However, “the industry faces a number of challenges that have the potential to dampen, and possibly even undermine, the sector’s recovery,” said Stephen Sandherr, AGC’s CEO.  Among those are concerns over a worker shortage and the quality of workers, as well as increased competition and rising health care and labor costs along with more government regulations.

Mitigating the risks

To deal with the worker shortage, nearly half the firms have increased their base pay rates, 30% have incentive or bonuses in place, and nearly one-quarter have upped their contributions to employee benefits.

In addition, 41% plan to increase what they spend on IT, primarily on accounting, estimating and project management software, to enhance their competitiveness in winning contracts, and as Jon Witty of Sage Construction and Real Estate, North America, says, enhance their productivity levels.

Only 4% of respondents reported having difficulty obtaining loans, down from 7% a year ago, indicating a slight easing in the credit market.