Contractors are optimistic that economic conditions will remain strong as tax rates and regulatory burdens fall, according to the results of the survey by the Associated General Contractors of America (AGC) and Sage Construction & Real Estate.
However, many firms report they remain worried about workforce shortages and infrastructure funding, according to the survey, Expecting growth to continue: the 2018 construction industry hiring and business outlook.
Association officials noted that 75% of firms said they will increase their headcount in 2018, up slightly from 73% last year. Most of the hiring will only expand headcounts by a slight percentage per firm, however. Half of firms report their expansion plans will only increase the size of their firm by 10% or less. Meanwhile, only five percent of firms report plans to expand their headcount by more than 25% above their current size. Only 3% of respondents expect to reduce headcount, down from 6% last year.
"Construction firms appear to be very optimistic about 2018 as they expect demand for all types of construction services to continue to expand," said AGC chief executive officer Stephen Sandherr. "This optimism is likely based on current economic conditions, an increasingly business-friendly regulatory environment and expectations the Trump administration will boost infrastructure investments."
Respondents are very optimistic about demand for all types of construction services as measured by the net positive reading – the%age of respondents who expect a market segment to expand vs. the%age who expect a market segment to contract. The net positive reading for all types of construction is 44%, the highest yet recorded in the association's Outlook survey series.
Broken down by market segment, contractors nationwide are most optimistic about the private office market segment, with a 22% net positive reading. This is followed by the other transport and retail, warehouse & lodging segments, both of which had a 21% net positive reading. Water & sewer construction had a net positive reading of 20%; school construction had a net positive reading of 18% and highway and hospitality construction both had a 17% net positive reading.
Even as firms expand headcount, an overwhelming majority - 82% - of firms expect it will either become harder, or remain difficult to recruit and hire qualified workers in 2018, up from 76% last year. In addition, 78% of firms report they are currently having a hard time finding qualified workers to hire, up from 73% at the start of last year.