Contractors remain bullish

Contractors are overwhelmingly positive on the current trajectory of the commercial construction industry, with 95% of those surveyed this summer expecting revenues to grow or remain stable over the next 12 months compared to the prior-year period. That’s according to the Q3 USG Corporation + U.S. Chamber of Commerce Commercial Construction Index, which also found 93% expect to see profit margins stay the same or increase in the next 12 months.

While contractor sentiment reflected a healthy outlook, there is concern for

the ongoing dearth of skilled labor; nearly 60% of contractors said they had difficulty finding skilled workers, with 91% stating they were at least “moderately concerned” about the skill level of the existing workforce. In the South, 66% of contractors expressed concern about the availability of skilled labor, a situation that could worsen in the wake of Hurricanes Harvey and Irma.

The Index gauges confidence in the commercial construction industry based on backlog levels, new business opportunities and revenue forecasts.  On average, contractors currently hold 9.5 months of backlog, close to their average ideal amount of 12 months, indicating a steady market and healthy amount of booked work. Regarding new business, 54% reported high confidence over the next 12 months (compared to 59% in Q2); and 67% expect revenues to grow or remain stable in the next year.

“The commercial construction industry employs millions of Americans and the contributions the sector makes to the U.S. economy are vital to our country’s growth,” said Thomas J. Donohue, president and CEO of the U.S. Chamber. “However, finding skilled workers remains a challenge for this industry, and it’s likely to remain a challenge in the areas affected by the recent hurricanes. Finding skilled construction workers will be essential to ensure the Gulf region is able to quickly and efficiently rebuild. Our nation must address our workforce challenges to enable the economy to grow.”

Other findings from the Q3 report: 53% said they plan to hire new workers, down from 66% in Q2.  Respondents identified safety, technical proficiency, and communication as the most valued skills on the jobsite.

The full report is available here.