US construction firms optimistic about 2018

Thursday, 04 January 2018 00:22:29 (GMT+3)   |   San Diego
       

Seventy-five percent of construction firms plan to expand their payrolls in 2018 as contractors are optimistic that economic conditions will remain strong as tax rates and regulatory burdens fall, according to survey results released by the Associated General Contractors of America and Sage Construction and Real Estate.

Construction firms appear to be very optimistic about 2018 as they expect demand for all types of construction services to continue to expand,” said Stephen E. Sandherr, the association's chief executive officer. “This optimism is likely based on current economic conditions, an increasingly business-friendly regulatory environment and expectations the Trump administration will boost infrastructure investments.”

Respondents are very optimistic about demand for all types of construction services as measured by the net positive reading – the percentage of respondents who expect a market segment to expand vs. the percentage who expect a market segment to contract. The net positive reading for all types of construction is 44 percent, the highest yet recorded in the association’s Outlook survey series.

Broken down by market segment, contractors nationwide are most optimistic about the private office market segment, with a 22 percent net positive reading. This is followed by the other transportation and retail, warehouse and lodging segments, both of which had a 21 percent net positive reading. Water and sewer construction had a net positive reading of 20 percent; K-12 construction had a net positive reading of 18 percent and highway and hospitality construction both had a 17 percent net positive reading.

Respondents were only slightly less optimistic about growing demand in other segments. There is a 16 percent net positive for both multifamily residential and public building segments, followed by a 13 percent net positive reading for power construction, an 11 percent net positive for higher education construction and an 8 percent net positive for federal construction.

Association officials noted that 75 percent of firms say they will increase their headcount in 2018, up slightly from 73 percent last year. Most of the hiring will only expand headcounts by a slight percentage per firm, however. Half of firms report their expansion plans will only increase the size of their firm by 10 percent or less. Meanwhile, only 5 percent of firms report plans to expand their headcount by more than 25 percent above their current size. Only 3 percent of respondents expect to reduce headcount, down from 6 percent last year.

Association officials noted that firms in many parts of the country are already adding to their headcounts. According to a new analysis of Labor Department data the association is releasing today, construction employment increased in 255 out of 359 metro areas between November 2016 and November 2017. Among the fastest growing metro areas are Riverside-San Bernardino-Ontario, California; New York City and Cheyenne, Wyoming.


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