The Associated General Contractors of America (AGC) and Sage Construction & Real Estate teamed to produce a construction hiring and business outlook for the year ahead.
The joint 2022 Construction Hiring & Business Outlook is the result of a survey sent out to AGC member firms gauging their expectations for labor and market conditions for the coming business year. This year, more than 1,000 firms participated in the survey, with the overall responses being positive.
Stephen Sandherr, AGC’s CEO, says contractors are optimistic about the year in front of them.
“They expect demand for most types of projects to increase and, as a result, most firms plan to add staff,” Sandherr says. “Contractors also continue to invest in new technologies that are designed to make them more efficient and effective. Contractors are far more upbeat about this year than they were at the start of 2021, when our members expected demand for many types of projects to contract and were less bullish in their hiring plans.”
Still, contractors recognize 2022 will present some headwinds.
“Chief among those challenges are supply chain problems that are making it hard to budget for and procure key construction materials,” Sandherr says. “And workforce shortages remain severe and are making it difficult for contractors to keep pace with demand.”
Bullish on 2022
According to AGC, contractors are most optimistic about the market for highway and bridge construction.
There is similar optimism for transit, rail and airport projects, as well as water and sewer projects.
All of these segments stand to see increased federal investments because of the Infrastructure Investment & Jobs Act, the association says. This funding, however, must be appropriated quickly.
“Congress must rapidly appropriate the funding it promised to deliver when it passed the bipartisan infrastructure bill,” Sandherr says. “These new investments are a key reason why contractors are so optimistic about the demand for infrastructure. Yet, Congress failed to include these new funds when it passed a temporary spending measure at the end of last year.”
Federal construction and power construction are also segments contractors are upbeat about.
Among predominantly private-sector categories, warehouse and health care facility projects – including clinics, testing facilities and medical labs – each drew positive responses from contractors, who also feel good about hospital construction.
Two segments that drew negative responses in the AGC survey were retail and private offices.
“The last two years have become increasingly unpredictable, due in large part to the coronavirus and public officials’ varied reactions to it,” says Ken Simonson, AGC’s chief economist. “But, assuming current trends hold, 2022 should be a relatively strong year for the construction industry.”
Technology expansion
Dustin Stephens, vice president of construction and real estate at Sage, says construction firms are being more strategic about information technology as they try to remain competitive in the current environment.
Sixty-one percent of contractors indicated in the AGC survey that they currently have a formal IT plan that supports business objects, and an additional 7 percent plan to create such a plan this year.
“Amid the challenges the industry faces, technology plays an essential role in keeping teams connected and projects moving,” Stephens says. “The past few years have highlighted just how crucial mobile and cloud-based solutions are, and we will continue to see these technologies play an integral role in helping construction firms bounce back.”
Stephens adds that most firms plan to keep their technology investment about the same as last year. When asked whether they planned to increase or decrease investment or stay the same in 15 different types of technologies, the majority of respondents said their investments would remain the same.
“As anytime, anywhere access has become more critical for construction firms, it is not surprising that we have seen gains in the use of cloud-based technologies over the past few years,” Stephens says. “More than half the firms (56 percent) use cloud-based technology for project management, up from 53 percent last year. Additionally, 47 percent of contractors use cloud technology for field operations, up from 42 percent last year.”
Contractor comments
Charlie Wilson, president of CT Wilson Construction in Durham, North Carolina, feels good about the months ahead but expects his company is one of many that will have to navigate a series of 2022 challenges.
“The labor constraints and issues of material procurement are really what’s holding us back,” Wilson says.
Additionally, Wilson says his local AGC chapter, which serves both North Carolina and South Carolina, has been working hard to attract people to the industry.
“We have money in the state budget to help do a hub business academy to try and get more people into construction,” he says. “We’ve got a ‘contractors in the classroom’ program put on by young leaders who are getting into schools early and trying to recruit people into the construction industry.
“There are rumors of a semiconductor plant that may come to one of four mega sites that they said would employ 10,000 people,” Wilson adds. “I don’t know where they’re going to find 10,000 people in our market right now.”
Chris Stanton, vice president for pre-construction at McCownGordon Construction in Kansas City, Missouri, sees plenty of opportunity ahead for his company in the central United States. McCownGordon is coming off a record-setting 2021, Stanton says, and has a strong backlog for 2022.
“We’re very fortunate in that aspect and with a lot of different and diverse vertical markets [such as] health care, higher [education], K-12 projects, corporate civic [and] manufacturing. We’re seeing a lot of growth in certain areas that are out there.”
Stanton sees room for additional improvement, though.
“Some of the things that we haven’t seen in quite a while is more state and civic projects on the commercial construction side,” Stanton says. “[That’s] what we do. Office buildings, labs, justice centers, community centers and aquatics are stuff we haven’t seen in quite a while. For a decade or so.”