It could be a very good year for the construction industry
A few news articles have appeared since the end of December about various plans to revitalize Philadelphia. There are big projects in the works, including the new Comcast tower and riverfront development. The question for construction firms, though, is whether they will have enough workers to do the jobs.
The Associated General Contractors of America recently released the results of its annual survey of construction companies. For the most part, 2014 looks like a good year, a growth year, even, but the availability of key professionals and craft workers is a concern.
The survey asked about 800 companies about their plans for the coming year. The questions touched on dollar volume in various construction categories and public policy concerns. For the most part, the respondents expected growth in spending in all but one category.
What we think of as commercial real estate should do the best, the respondents said. Dollar volumes for the manufacturing, retail/warehouse/lodging and office categories are expected to increase by 28 percent. The next most promising categories are hospitals/higher education and power, both estimated to increase 25 percent in 2014. Public works — water/sewer and highways — will see lower increases, but increases nonetheless. The “other transportation” category, public building category and K-12 school category should see minimal — less than 5 percent — growth over last year. Marine is expected to fall, though only by 2 percent.
All of this growth, though, depends on whether construction companies can find the right workers. More than 60 percent of the survey’s respondents indicated they were running into trouble finding craft workers and professionals. Craft workers include carpenters, equipment operators, welders and other skilled workers. Professionals are project managers, estimators, engineers and other “behind the scenes” workers.
According to the survey results, construction companies are finding that local pipelines for new workers in these categories are inadequate. They worry, too, that their bottom lines will suffer under the Affordable Care Act. The respondents added that the silica exposure rules of the Occupational Safety and Health Administration and the Environmental Protection Agency’s expanded jurisdiction over wetlands will be bad for business, too.
The message to Congress is pretty clear: Improve training programs for skilled workers and back off on regulations if you want the construction industry to grow this year.
The Business Journals, “Outlook improves for construction — if firms can find skilled workers,” Kent Hoover, Jan. 21, 2014
Associated General Contractors of America, “2014 Construction Outlook Survey Results,” January 2014