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News Jan. 15, 2020

Seventy-five percent of construction firms plan to hire in 2020

The Associated General Contractors of America and Sage Construction and Real Estate have released Strong Demand for Work Amid Stronger Demand for Workers: The 2020 Construction Hiring and Business Outlook Report, which shows construction firms expect increased demand and hiring in 2020 but are concerned about the labor shortage, according to www.forconstructionpros.com.

The percentage of survey respondents who expect a market segment to expand exceeds the percentage who expect it to contract for all 13 categories of projects included in the survey. For every segment, between 27% and 36% of respondents expect an increase compared with 2019 in the dollar value of projects for which they compete. Between 11% and 21% of respondents foresee less work available in 2020.

Most contractors plan to hire new workers in 2020 to keep up with increasing demand. Seventy-five percent of firms plan to hire this year compared with 77% in 2019 and 75% in 2018. However, 52% of firms report their staffing plans only will increase the size of their firms by 10% or less. About 19% of respondents plan to increase headcount by 11% to 25%. Only 5% of respondents plan to increase employment by more than 25%.

Although companies plan to increase staffing, 81% report they are having a difficult time filling salaried and hourly craft positions—up slightly from 78% at the beginning of 2019. In addition, 43% expect this difficulty to continue during the next 12 months, and 22% expect it will become more difficult to hire in 2020.

In response to the labor shortage driving costs higher, 41% of firms are putting higher prices into new bids and contracts. Additionally, 40% report projects have taken longer than anticipated, and 23% report putting longer completion times into their bids or contracts.

Companies also are responding to the labor shortage by increasing pay and benefits. Fifty-four percent of firms report they increased base pay rates more in 2019 than in 2018. Twenty-three percent provided incentives and/or bonuses, and 14% increased contributions or improved employee benefits.

Construction firms are investing more in training programs for new and existing workers; 32% percent of firms report they increased funding for technical education programs, and 29% have restructured or changed programming for current skilled labor recruits. Additionally, 46% of respondents will increase their information technology investments in 2020, with 30% planning to increase investment in project management software.

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