Office V Michigan

Commercial Construction Index: Labor costs a big concern for contractors

Commercial Construction Index: Plenty of optimism, some concern,ph01

U.S. contractors are confident in the commercial real estate industry. But they wish that construction jobsites were more efficient and that their workers were more productive.

The news, though, was largely good from the USG Corporation + U.S. Chamber of Commerce Commercial Construction Index released late last year. According to the index, 57 percent of contractors said they expected to hire new labor in the first half of 2018, while nearly half – 47 percent – said they expected to see an increase in revenue this year.

This doesn’t mean that there aren’t challenges. The index found that 90 percent of contrators don’t find jobsites to be efficient, with 44 percent blaming workers who aren’t as productive as they should be for this lack of efficiency

Contractors are also concerned about the cost of skilled labor. According to the index, 42 percent of contractors predict that it will become more difficult to find skilled workers in the next six month, while 92 percent say that they are at least moderately concerned about the skill level of their workforce.

“The commercial construction industry is essential to the U.S. economy. When America is building or re-building, America is growing. It’s great news that the majority of these companies are ready to hire,” said Thomas Donohue, president and chief executive officer of the U.S. Chamber, in a statement. “As worker shortages persist across industries, sectors like commercial construction will have to find solutions through new innovations, technology and training to continue growing and moving the broader U.S. economy forward.”

There were other interesting findings in the report. Contractors hold 9.4 months of backlog, a figure that is close to the average ideal amount of 12.5 months. The report found, too, that 99 percent of contractors report high or moderate confidence in the demand for commercial construction. About one-third of respondens – 34 percent – said that the market will continue to provide strong opportunities for the next 24 months.