91视频

By Ethan Duran

91视频 Newswire

Contractors are looking forward to pursuing public funding and projects in 2023 after dealing with聽supply chain and workforce challenges last year, a survey by the Associated General Contractors of America found.

A total of 42 percent of construction firms expect higher value from bridge, highway and transportation projects this year, according to the survey conducted by AGC and software company Sage. Ken Simonson, AGC鈥檚 chief economist, said water and sewer projects and federal projects were just behind at 38 percent and 37 percent, respectively.

鈥淲hile contractors remain upbeat about the available dollar value of projects to bid on in 2023, their expectations have definitely shifted compared to last year,鈥� he said during a webinar on Wednesday.

However, only 5 percent of respondents said they worked on projects funded by the Bipartisan Infrastructure Law signed by President Joe Biden in November 2021, Simonson said. A total of 6 percent of respondents won bids through the law but haven鈥檛 worked yet, and 5 percent have bid but haven鈥檛 won awards yet.

Meanwhile, power and other health care projects both scored at 28 percent in AGC鈥檚 survey 鈥� the highest expectations among private sector categories. Contractors were optimistic about hospital projects and public buildings, which scored at 23 percent each. Both K-12 and higher education construction were at 16 percent.

Lodging, private offices and retail construction still looked bearish, Simonson said, with readings of minus 4 percent, minus 21 percent and minus 22 percent, respectively. Respondents rated manufacturing construction 14 percent for 2023, compared to 27 percent a year ago. Data centers and warehouses joined manufacturing, both down more than 30 percent year-over-year.

Despite the optimistic readings, contractors were less confident about prospective growth聽than in 2022, Simonson said. All but three project types had fewer positive readings than last year, and multifamily and warehouse construction took the hardest hits 鈥� down 31 points from聽2022.

A total of 69 percent of respondents expected their headcount to increase over the next 12 months, but 58 percent said they expect hiring to be a challenge this year, AGC data showed. Of the construction firms that responded, 11 percent expect their workforce to decrease and 15 percent expect to hire workers more easily.

The number of contractors who had difficulty filling some or all salaried hourly craft positions came in at 80 percent, while 8 percent said they had no difficulty, Simonson said. The difficulty with increasing headcount was prevalent across both union and open shop firms.

Simonson said the lack of available labor likely explains why 72 percent of firms increased base pay rates more than in 2021. This was an increase from the 62 percent of firms who boosted pay more in 2021 than in 2020, and only 7 percent of firms didn鈥檛 increase pay, incentives or benefits in 2022, down from 12 percent in 2021. A total of 33 percent of respondents introduced or increased incentives and bonuses last year, AGC data showed.

Alongside headcount woes was supply chain issues, as only 9 percent of contractors reported not facing significant supply chain problems in 2022, AGC data showed. Many respondents accelerated purchases after winning contracts and most turned to alternative suppliers to deal with supply chain problems, Simonson said. Nearly half specified alternative materials or products and close to one quarter stockpiled items before winning contracts, he added.

Many contractors reported project delays or cancellations in 2022: 39 percent said a聽postponed聽project was rescheduled, 36 percent had postponed or canceled a project without rescheduling, and 13 percent of firms have already canceled or postponed a project that was scheduled to begin in the first half of 2023, Simonson said. The main culprit for project delays was rising costs in different areas, including construction, financing and insurance, half of survey respondents said.

A total of 12 percent of contractors canceled or postponed projects due to owners having less funding available and 8 percent said cancelations and postponements followed a delay in the likely completion date, Simonson said. Because of supply chain and workforce challenges, many firms turned to technology to increase their efficiency, he added.

In AGC鈥檚 final outlook report, a total of 74 percent of respondents said the possibility of an economic slowdown or recession was their biggest concern. Material costs (73 percent), insufficient labor and contractors (70 percent) and rising interest rates or financing costs (67 percent) followed.

Between 68 percent and 91 percent of construction firms choosing from 15 types of technologies planned to keep their technology investment about the same as last year, Sage Vice President of Construction and Real Estate Dustin Stephens said during the webinar. Of nearly a third of firms who wanted to increase tech investments in 2023, the top categories they picked were document management software and project management software.

鈥淎s construction firms seek more flexibility and anytime, anywhere access from their solutions, we have seen more firms turning to cloud-based technologies the past few years,鈥� Stephens said.

Project management was the most popular program for cloud-based technology, with 57 percent of firms using it, he added.

For the infrastructure law and federal projects to benefit the industry, action will need to come from the top of the federal government, AGC CEO Stephen Sandherr said. 鈥淭o do that, they will need to address much of the regulatory and permitting uncertainty that muted the hoped-for benefits of the Bipartisan Infrastructure Law in 2022. For example, the Biden administration will need to resolve the significant uncertainties that exist around the Buy America provisions within the Bipartisan Infrastructure Law.鈥�

The administration hasn鈥檛 settled on a uniform interpretation of requirements within the law and federal agencies will likely have inconsistent interpretations of which materials are covered, Sandherr added.

鈥淭his regulatory uncertainty will make it harder for state and local officials to move forward with vital infrastructure projects, since so many of the components needed could potentially be tripped up by the Buy America requirements,鈥� he said.

The association also pushed for labor and tax provisions included in the Inflation Reduction Act, as well as immigration reform and investments in career and technical education programs.

鈥淲e will continue to be vigorous advocates for the industry in Washington (D.C.) and with public officials across the country,鈥� Sandherr said. 鈥淭he bottom line is we will do everything in our power to make sure that 2023 is a successful one for the industry, our members and the tens of thousands of men and women that they employ.鈥�