Dive Brief:

• In its first-quarter 2019 Commercial Construction Index report, USG Corp. and the U.S. Chamber of Commerce reported that 70% of contractors are struggling to meet project deadlines due to a shortage of skilled workers. 
• The group’s survey also revealed that the labor shortage is forcing the majority of contractors (81%) to require that their existing employees do extra work. It has also increased their costs for new work for 63% of respondents and has resulted in 40% of them having to turn down project offers. 
• Contractors participating in the survey said that the most common industry misperceptions keeping new workers from entering the field are that construction is a "dirty job," that requires physical strength over other attributes and isn’t really a career. Respondents said the key to attracting younger workers to the industry is to emphasize the potential for high pay, good benefits, a path for career advancement and the chance to work with advanced technology.

Dive Insight:

These results echo those of a National Association of Home Builders poll from a few years ago that found that young people were discounting the construction industry as a career choice. However, unlike the USG and Chamber survey, the NAHB found that 63% of those undecided about a career wouldn’t choose construction regardless of the pay. 

The latest Commercial Construction Index also provided some additional insight about the current state of the industry. For one, contractors are still optimistic about the industry despite the persistent labor issues. The current confidence score, however, fell three points to 72.

Driving this downward movement was general caution about issues that have been weighing on contractors’ minds for some time now — the state of the economy, rising interest rates and higher material costs. The score could also have been impacted by the 35-day federal shutdown, as the poll was taken during that period.

Earlier this month, Wells Fargo Securities issued its latest report on the state of the commercial construction industry and, from the perspective of a select group of contractors, construction equipment rental companies, distributors, dealers and manufacturers, 2019 should continue to see healthy growth in the nonresidential sector. 

Using projected equipment rental and purchase patterns, Wells Fargo found a high level of optimism among respondents, but, as in the USG and Chamber report, saw caution on the part of participants as well, which has led to uncertainty about how the industry will perform in 2020 and beyond.