|Persistent Workforce Shortages Challenge Commercial Construction Industry as U.S. Building Demands Continue to Grow|
To Offset the Lack of Skilled Workers, Contractors Increase use of Efficient Building Approaches
WASHINGTON, D.C. –The Q1 2018 USG Corporation + U.S. Chamber of Commerce Commercial Construction Index (Index), released today, reveals nearly two-thirds of contractors are highly confident that demand for commercial construction will increase over the next year, however, continued concerns around labor shortages have put even greater pressure on the industry. To increase jobsite efficiency and improve labor productivity, increasingly more builders are turning to alternative construction solutions, like prefabrication and modularization.
The Q1 Index indicates contractors turn to innovations such as prefabricated and modular building materials to create more efficient jobsites (89 percent), increase labor productivity (85 percent), drive cost savings (58 percent), and provide a competitive advantage in the marketplace (51 percent). In fact, 50 percent of contractors report their companies already use prefabricated and modular components and the number was even higher among general contractors (72 percent). Nearly two-thirds (63 percent) of contractors report at least moderate demand for these building materials.
Contractors in the Northeast (69 percent) reported the most frequent usage of prefabricated and modular components, compared to the South where only 24 percent indicate their companies are using these materials. Firms in the Northeast also expect to hire fewer workers—38 percent of contractors in the region expect to employ more staff in the next six months, compared with 57 percent in the South, 59 percent in the West, and 68 percent in the Midwest. Across all regions, concern over the cost of hiring skilled labor has remained consistent over the past year—nearly two-thirds (64 percent) of contractors expect these costs to increase in the next six months.
Despite labor concerns, contractor sentiment remained steady for the first quarter, as a result of strong revenue expectations and higher profit margins, with a composite score of 74.
“As we work to continually build our neighborhoods, towns, regions, and roads, as well as the workforce that supports our growth, innovation becomes a key component in advancing our country into the 21st century,” said Thomas J. Donohue, president and CEO of the U.S. Chamber. “We must invest in a skilled, competitive, motivated workforce and embrace new innovations to ensure we are able to compete on a global scale.”
The Index looks at the results of three leading indicators to gauge confidence in the commercial construction industry – backlog levels, new business opportunities and revenue forecasts – generating a composite index on a scale of 0 to 100 that serves as an indicator of health for the contractor segment on a quarterly basis. The Q1 2018 composite score was 74, holding steady from Q4 2017.
The Q1 2018 results from the three key drivers were:
The research was developed with Dodge Data & Analytics (DD&A), the leading provider of insights and data for the construction industry, by surveying commercial and institutional contractors.
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Please note the Commercial Construction Index report is intended for general informational purposes only. It is not intended to support an investment decision with respect to USG Corporation, nor is it intended to be used for marketing purposes to any existing or prospective investor of USG. This report is not a forecast of future results for USG and actual results of USG may differ materially from those of the commercial construction industry.
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