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The Associated General Contractors of America reported on Thursday that the construction industry will see a mix of ups and downs across different segments in the new year. After surveying nearly 1,300 contractors with Portland-based Sage, AGC released the .

鈥淭he survey finds the outlook for 2024 is decidedly mixed, as contractors predict transitions in demands for projects, the challenges they will face and technology they will embrace,鈥� said Stephen A. Sandherr, AGC’s chief executive officer.

Problems with labor shortages, high interest rates and supply chain improved but were still far from normal, he added. That news is compounded with fears over high interest rates and the possibility of a recession.

Infrastructure and public projects remain prime

Ken Simonson, AGC’s top economist, said optimism around most project types was positive but still lower than it was a year ago.

Contractors expected the value of infrastructure projects to be higher in the new year, the survey showed. Water and sewer were at 32 percent, followed by transportation at 30 percent and bridge and highway projects at 30 percent, according to survey results.

Lodging, retail and private office construction will be 鈥渂earish,鈥� Simonson remarked. The value for lodging is expected to fall by 3 percent, retail down by 15 percent and private office down by 24 percent, the survey showed.

While the value of public projects was expected to increase, the number of respondents who actually worked on projects supported by Bipartisan Infrastructure Law showed a different story. According to the survey, only 9 percent of respondents said they actually worked on projects supported by the law.

Six percent of contractors said they won infrastructure-law project bids but haven’t started work and 7 percent said they bid on projects but haven’t won awards yet, the survey showed. A total of 33 percent of respondents said they don’t expect their business to change because of the law. The remaining 30 percent said they didn’t know what changes would happen, the survey showed.

AGC asked contractors to predict whether their workforce would increase in 2024. A total of 69 percent of firms responded they would see an increase in their headcount. Of that group, nearly 50 percent said their headcount would rise by 10 percent or less. A total of 18 percent said their headcount would increase by more than 11 percent, while only 4 percent thought their firms would grow by more than 25 percent.

Rising interest rates and financing costs were the top concern for 64 percent of contractors in 2024, survey results showed. Other costs such as trucking, insurance and design services were at 63 percent and economic slowdown or recession at 62 percent.

The remaining top concerns were material costs, direct labor costs, worker quality and an insufficient supply of workers or subcontractors.

Construction continues to invest in technology

鈥淭echnology will play an important role in helping teams increase their efficiency with limited resources,鈥� said Dustin Stephens, the vice president of marketing and real estate at Sage.

Between 61 and 89 percent of firms said their technology investment will remain the same, the survey showed. Accounting and project management software both grew at 38 percent. Firms also put more dollars toward document management and estimating software.

According to the survey, around two-thirds of construction firms said they will use mobile software technology for daily field reports. Nearly 60 percent said they will use it for employee time tracking and approval.

The largest information technology challenge for contractors was finding the time to implement new technology and training employees, according to the survey. Cybersecurity and employee resistance to technology took second and third place, respectively, in IT challenges.

Industry wants more young people in the trades pipeline

Sandherr made a call to federal and local officials to boost investment in construction training. He said it was critical for federally funded projects that were likely to start in 2024, which also boosted the industry.

鈥淢any kids don’t know (construction) is a career path,鈥� he added.

AGC officials said they would push for new funding for construction education and training, using momentum from talks around programs such as the Pell Grant. Sandherr explained that AGC wanted to see more people lawfully enter the country and help patch workforce shortages.

Contractors share their predictions

Lynn Hansen, CEO of South Carolina-based Crowder Constructors, said that her firm’s future was bright as it worked on public projects.

鈥淚’m optimistic about Crowder’s markets for the coming year. Our infrastructure markets where we focus water, waste, power, highways and bridges will be fairly strong,鈥� Hansen added.

The executive noted that labor was still a top concern going forward, but those who the company recruited made more than what they previously earned. New engineers needed the least training, so the company was figuring out ways to streamline the process.

鈥淲e have good job training for project managers and leaders, but not as good with the craft level,鈥� Hansen noted. Crowder established a registered apprenticeship program a few years ago to pick up the slack, she explained.

While supply chain has improved, finding certain pieces of electrical equipment has remained a challenge, Hansen noted. Some of those delays have gone from months to years and created costs for both general contractors and their clients, she added.

鈥淢y new year’s wish is for some stability in the industry. Our employees would like that also,鈥� Hansen said.

By the numbers outlook in Oregon

Oregon firms answered similarly to AGC’s national survey results but differed in some places such as hiring and the types of projects most valued in 2024. A total of 34 Oregon companies answered survey questions.

Most companies predicted the value of projects would stay the same throughout 2024 regardless of what segment. Respondents said they thought the biggest increases would happen for federal (33 percent), hospital (31 percent) and bridge/highway projects (15 percent).

Oregon companies’ predictions about which segments would falter differed somewhat from the national survey, with multifamily residential falling by 33 percent, private office by 27 percent and retail also at 27 percent.

Of responding firms, 32 percent predicted that they would increase their headcount by 1-10 percent in 2024. Around 12 percent answered their firms would grow 11-25 percent, and 3 percent said they would increase by more than 25 percent. Around 21 percent of respondents said their headcount would decrease by around 1-10 percent.

Federal funding was somewhat of a question mark in Oregon compared to the national average. While the national average respondents did not expect any changes because of the Bipartisan Infrastructure Law, around 39 percent of responding firms in Oregon reported not knowing if the law made a difference to their businesses. Around 33 percent said they didn’t expect their business to change because of the law, 9 percent have worked on new projects funded by the law and 9 percent report that they plan to bid on projects but nothing suitable has been offered yet.

Rising interest rates/financing costs was the biggest expected challenge for Oregon construction in 2024, around 79 percent, the survey showed. The next largest concerns were economic slowdown/recession at 76 percent and rising direct labor costs at 61 percent.