2017’s Outlook for Construction

AGC Data Digest

Originally published by Bob Adair 

Contractors are optimistic, on balance, about the 2017 outlook for nonresidential and multifamily construction, based on the 1,281 responses to a survey that AGC released.

About 46% expect the available dollar volume of projects they compete for in 2017 to be higher than in 2016, while 9% expect the volume to be lower, for a net positive reading of 36%. The net reading was positive for all 13 market segments included in the survey, the net was highest for hospital and retail, warehouse and lodging construction, at 23% each; followed by private office, 20%; manufacturing, 18%; highway and public building, 15% each; higher education, K-12 school and water/sewer, 14% each; multifamily and other transportation, 11% each; power, 10%; and federal construction, 7%. The net reading was a few points higher than in 2016 for all categories except multifamily (down from 14%).

The survey was conducted from November 1 to mid-December; most respondents replied after Election Day. Only 6% of respondents expect their firms to reduce headcount in 2016 vs. 73% who expect an increase. In addition, 73% say they are having a hard time filling key salaried or hourly craft positions and 76% say it will be as hard or harder to do so in 2016.

These results were broadly similar to those of AGC’s September 2016 workforce survey and January 2016 outlook survey. Of 15 issues listed as answers to a question regarding “the biggest concerns to you and your business,” 55% picked worker shortages; 46% chose worker quality; 42%,rising direct labor costs; 48%, increased competition for projects; and 41%, growth in federal regulations. All of these percentages were slightly higher than in 2016.