The construction industry has had its share of challenges in recent years, including the shortage of skilled labor, with the 2018 Q2 Commercial Construction Index finding that nine out of 10 construction contractors reported difficulty finding skilled workers. The report also indicated increased cost of construction materials has imposed problems for contractors in getting construction projects completed on time.
However, 2020 may be a better year for the construction industry. The Q3 Commercial Construction Index reports that half of all contractors expect revenue increases during the next year with 58% reporting they expect to see new business opportunities within the next 12 months.
The industry still has challenges to overcome. Three-quarters of contractors reported they experienced schedule delays due to extreme weather events, including recent hurricane destruction. Even so, only 38% of contractors reported including weather aspects when calculating bids on projects.
As construction contractors are faced with rebuilding efforts after extreme weather events such as hurricanes, resiliency has become a timely topic. Contractors agree that in the future, building codes should be based on resiliency factors to help buildings withstand the effects of severe weather and natural disasters.
The shortage of skilled labor is still a factor going into 2020 with more than 50% of contractors reporting they have turned down jobs due to a shortage of skilled workers. As in past quarters, contractors are looking to hire more workers with 61% reporting they have plans to increase the size of their workforce.
Market predictions from the American Institute of Architects (AIA) report continued growth in non-residential construction with an expected increase of 2.5% in 2020. New projects will trend toward industrial construction as retail construction continues to decline.
Residential construction will likely continue to also face challenges ahead in 2020 with builders reporting lower mortgage rates have not boosted the housing market because of economic uncertainty. Overall, slow growth is expected on both the commercial and residential fronts with cautious optimism due to economic uncertainties for the construction industry in 2020.