Labor, tariffs continue to worry contractors
A shortage of labor continues to weigh on the minds of contractors, according to the Q2 USG + U.S. Chamber of Commerce Commercial Construction Index.
While the latest index demonstrates optimism in the commercial construction industry – including contractor backlogs, new business confidence, and revenue expectations remaining strong –a shortage of skilled workers continues to trouble the industry.
The latest index marks the fourth consecutive quarter with more than 90% of contractors expressing concern over labor shortages. Concerns have increased quarter-over-quarter, with 47% of respondents in Q2 expecting problems finding skilled workers to worsen in the next 6 months.
About 50% of contractors are highly concerned about the skill levels of the workforce, but the percentage declined slightly from 52% in Q1, according to the index. Also, more than 57% of contractors want to employ more workers in the next six months, but are challenged by availability and cost.
Steel prices and tariffs are also troubling pros: the percentage of contractors concerned about fluctuations in steel prices jumped in Q2, with 63% of contractors identifying steel fluctuations as their top material of concern – an increase of 33% over Q2 2017. Also, 86% of contractors feel that the recently-imposed steel and aluminum tariffs will have at least a moderate impact on their business.
On another front, sustainable, green building is an emerging area of opportunity. More than half of general contractors nationwide report that they gain a competitive advantage from the ability to build sustainably while 80% of contractors report that their customers request energy efficient materials.
Nearly all contractors – about 96% - report high to moderate confidence, down only 2% from Q1 2018. This demonstrates consistent expectations for sufficient new business opportunities. In the meantime, 29% of contractors expect healthy revenue increases of 7% or more for the next 12 months.
A full copy of the latest report can be found at the U.S. Chamber of Commerce.
While the latest index demonstrates optimism in the commercial construction industry – including contractor backlogs, new business confidence, and revenue expectations remaining strong –a shortage of skilled workers continues to trouble the industry.
The latest index marks the fourth consecutive quarter with more than 90% of contractors expressing concern over labor shortages. Concerns have increased quarter-over-quarter, with 47% of respondents in Q2 expecting problems finding skilled workers to worsen in the next 6 months.
About 50% of contractors are highly concerned about the skill levels of the workforce, but the percentage declined slightly from 52% in Q1, according to the index. Also, more than 57% of contractors want to employ more workers in the next six months, but are challenged by availability and cost.
Steel prices and tariffs are also troubling pros: the percentage of contractors concerned about fluctuations in steel prices jumped in Q2, with 63% of contractors identifying steel fluctuations as their top material of concern – an increase of 33% over Q2 2017. Also, 86% of contractors feel that the recently-imposed steel and aluminum tariffs will have at least a moderate impact on their business.
On another front, sustainable, green building is an emerging area of opportunity. More than half of general contractors nationwide report that they gain a competitive advantage from the ability to build sustainably while 80% of contractors report that their customers request energy efficient materials.
Nearly all contractors – about 96% - report high to moderate confidence, down only 2% from Q1 2018. This demonstrates consistent expectations for sufficient new business opportunities. In the meantime, 29% of contractors expect healthy revenue increases of 7% or more for the next 12 months.
A full copy of the latest report can be found at the U.S. Chamber of Commerce.