According to a survey released Wednesday from the Associated General Contractors of America, 80 percent of construction firms plan to expand their payrolls in 2015 while only 7 percent expect to reduce headcounts. The survey, conducted as part of Ready to Hire Again: The 2015 Construction Industry Hiring and Business Outlook, indicates that most contractors are optimistic about the year ahead and ready to expand, but will have to cope with challenges including worker shortages and regulatory burdens.
"Contractors are extremely optimistic about the outlook for 2015," said Stephen E. Sandherr, the association's chief executive officer. "Indeed, if their predictions prove true, industry employment could expand this year by the most in a decade."
Sandherr noted that the number of firms planning to add employees - 80 percent - in 2015, is significantly higher than in 2014, when only 57 percent of firms report they added to their total headcount. However, many firms that plan to hire this year expect to make only modest increases, with 90 percent of the firms that expect to add employees reporting they will expand by one-quarter or less this year.
Growing demand for private-sector construction should drive growth in 2015, association officials noted. Contractors are most optimistic about the retail/warehouse/lodging segment, with the difference between optimists and pessimists - the net positive reading - at 33 percent. Contractors are also optimistic about the manufacturing, private office and energy construction segments, with net positive readings of 26, 25 and 24 percent respectively.
Contractors are also optimistic about some public sector construction segments, especially those segments that aren't entirely dependent on federal funding. Contractors gave the outlook for water and sewer construction a new positive of 24 percent. They have the highway market a net positive reading of 16 percent and higher education 15 percent.
Contractors are less optimistic about the outlook for two market segments that rely almost exclusively on federal funding - marine construction and direct federal construction. There was a net negative reading of 6 percent for marine construction and a net negative of 16 percent for the direct federal construction segment.
Seventy-nine percent of firms report they plan to purchase new construction equipment in 2015 and 81 percent plan to lease new equipment. However, the scope of those investments is likely to be limited, with roughly two-thirds of firms that plan to buy or lease equipment reporting they will invest $250,000 or less.