Surveys behind the Q1 2019 USG + U.S. Chamber of Commerce Commercial Construction Index find that the labor shortage continues to pose major challenges to the industry, causing contractors to ask skilled workers to do more work (81 percent of respondents), struggle to meet deadlines (70 percent), increase costs for new work (63 percent), and reject new projects (40 percent).
As the industry fights to solve the labor shortage, the latest survey suggests a contributing factor could be young workers’ negative perceptions of construction careers, leading to fewer candidates entering the labor pool. When asked about the biggest myths surrounding commercial work, contractors cited the perception of “dirty” jobs (61 percent); tasks requiring only brute strength (55 percent); and, construction representing a “job” versus career (52 percent). Yet, contractors note good pay, opportunities for advancement, and the ability to learn new skills on the job as the best reasons to pursue a career in construction.
“It is important for construction leaders to consider how we can shift the perception of the industry and increase the number of young workers who want to work in the trades,” says USG CEO Jennifer Scanlon, chief executive officer of Chicago-based USG Corp. “Retention will be particularly important to meet infrastructure demands, as well as a continued focus on innovative processes and technology on the jobsite.”
Contractors agree that the best way to increase the skilled workforce in U.S. construction is to boost technical school enrollment and vocational training. A better reputation for compensation, apprenticeship programs and opportunities for advancement were also cited among Q1 2019 Commercial Construction Index survey participants as ways to recruit more workers, particularly those under the age of 30. To retain employees, 55 percent of contractors believe there should be more opportunities for advancement, in addition to increased employee engagement and more on-the-job training. The growing role of technology on the jobsite was also cited as a means to attract the next generation of workers to the construction workforce.
The Index factors survey responses from up to 2,700 commercial construction stakeholders and measures three leading indicators—backlog, new business confidence, revenue—to gauge confidence in the industry. A composite index on the scale of 0 to 100 serves as contractor segment indicator on a quarterly basis. Overall, the Q1 Index composite score of 72 shows a healthy market though contractors may be slightly more cautious about the health of the commercial construction industry. The survey was fielded in January during the federal government shutdown, authors observe, so concerns about economic stability and future growth were likely more top-of-mind than in previous surveys. Data about industry perceptions should still be troubling to anyone looking to solve the prevailing labor shortage, USG and Chamber officials note.
“The first quarter findings suggests that the fundamentals of the construction industry remain strong, but to sustain future growth, it is clear that we need bipartisan policy solutions from Washington that promote trade, reform our immigration system, and better prepare America’s workforce for the jobs of today and tomorrow,” says Chamber Chief Policy Officer Neil Bradley.
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| The full Q1 2019 USG + Chamber of Commerce Commercial Construction Index report is posted at www.uschamber.com. |
The Index looks at the results of three leading indicators to gauge confidence in the commercial construction industry, generating a composite score on the scale of 0 to 100 that serves as an indicator of health of the contractor segment on a quarterly basis. The Q1 2019 results from the three key drivers were:
- Backlog. Contractors’ ratio of actual to ideal backlog dropped three points to 77 (down from 80 in Q4 2018). In Q4 2018, 41 percent of respondents said their backlog had increased. This quarter, that number fell to 28 percent.
- New business confidence. The level of overall confidence dropped five points (from 76 to 71) quarter-over-quarter.
- Revenue. The revenue driver dropped two points to 67 this quarter, indicating moderated expectations for the magnitude of revenue growth in the next 12 months.
The research was developed with Dodge Data & Analytics, the leading provider of insights and data for the construction industry, by surveying commercial and institutional contractors. Each quarter, Dodge researchers source responses from their Contractor Panel of commercial construction decision makers in order to better understand industry confidence levels and other key trends. The panel allows the firm to provide findings that are representative of the entire U.S. construction industry by geography, size, and type of company.