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U.S., UK Construction Hiring to Surge

Wednesday, January 28, 2015

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New forecasts on both sides of the Atlantic put construction job seekers in the driver's seat this year, with projects on the upswing and many firms planning to expand.

Eighty percent of U.S. firms surveyed plan to expand their payrolls this year, while the UK is looking at a quarter-million new construction jobs over the next five years.

That is the view from Ready to Hire Again: The 2015 Construction Hiring and Business Outlook from the Associated General Contractors of America and Industry Insights from the UK's Construction Skills Network.

CITB

The UK's Construction Industry Training Board projects 224,000 new construction jobs by 2019. In the U.S., 80 percent of U.S. construction firms say they plan to add new hires this year.

"Contractors are extremely optimistic about the outlook for 2015," said Stephen E. Sandherr, AGC's chief executive officer. "Indeed, if their predictions prove true, industry employment could expand this year by the most in a decade."

U.S.: Widespread Gains

The 80 percent of U.S. firms with expansion plans this year bests last year's figure of 57 percent, AGC said. The growth by individual company is likely to be modest, with 90 percent of firms reporting that they will expand by one-quarter or less. Meanwhile, seven percent plan to shrink their head count.

Still, the potential gains are dramatic: For example, 95 percent of firms in Virginia say they plan to expand their payrolls this year. And 10 percent of firms plan to expand between 28 and 50 percent. Meanwhile, 44 percent of firms are planning to pursue projects outside their traditional geographic market areas, according to the report.

MarketChart
AGC

Most U.S. segments are in for gains this year, the Associated General Contractors reports.

This is the first time since the AGC Outlook survey began in 2009 that a majority of contractors voiced optimism about market growth in the current year, the organization said.

Private Gains, Public Concerns

Much of the growth in 2015 will come from the private sector, particularly in the retail/warehouse/lodging segment, the AGC said. Contractors also expressed optimism about growing demand for manufacturing, private office and energy construction.

Prospects for public-sector construction drew a mixed response. Projects that do not require federal funding hold the most potential, especially water and sewer construction. Highway and higher-education may also grow.

On the other hand, contractors say they are not banking on direct federal construction projects (defense facilities, federal courthouses and office buildings) or federally funded marine projects.

Where the Growth Is

Potential growth areas vary by region, with contractors in the Northeast most optimistic about the 2015 outlook for highway construction, those in the South keeping an eye on "other" transportation and hospitals, the West focusing on water and sewer construction and education, the Northeast banking on power, and the Midwest expecting gains from retail, lodging and manufacturing.

Contractors
CITB

Boosted by Crossrail and other major projects already underway, the UK is predicting construction gains nationwide, if Eurozone demand picks up.

Energy construction should be strong nationwide, and strongest in the Northeast, the report said.

UK: 'Construction Comeback'

The UK analysis projects "growth in each region and nation of the UK," writes Adrian Belton, chief executive of the government's Construction Industry Training Board (CITB), which produced the report.

After a "difficult few years," says Belton, "this report marks the commencement of the big construction comeback," with 224,000 new jobs expected between 2015 and 2019.

The gains will come from nearly every rank and trade, from painters and roofers to arcchitects and project managers, the report says. But—and it's a big but, the report concedes—sustained growth will require more demand than the Eurozone has been showing lately.

The recent political volatility in Greece has the report's authors particularly concerned. On the other hand, they say, prospects in Asia "are generally buoyant."

HinkleyPointNuclearPowerStation
Richard Baker / CC BY-SA 2.0

New construction at Hinkley Point Nuclear Power Station would boost the UK's infrastructure activity.

After a booming year for housing in 2014, the report says, growth will begin to subside but still remain higher than the last housing growth spurt of 1995 to 2007.

The struggling infrastructure market may regain ground with major projects like Crossrail underway and new construction planned at the Hinkley Point Nuclear Power Station in Somerset. But declines are expected to continue in public non-housing projects, especially school and college construction.

Commercial construction should strengthen, especially in the office and leisure sectors, the report said.

Avoiding Shortages

The good news for job applicants is not such good news for employers, the AGC notes. The organization reiterated its oft-stated concerns about construction labor shortages, especially among skilled workers.

ConstructionWorker
CITB

The good news for job hunters may not be so good for the contracting firms competing to hire them.

Nearly 90 percent of respondents told AGC that they were "having a hard time filling key professional and craft worker positions." Craft worker slots are harder to fill than professional positions, the firms say.

The pinch is likely to grow, with 81 percent expecting continued trouble finding craft workers and 72 percent anticipating an uphill road in finding professionals. As it has before, AGC called again for increased federal support of training and technical programs to prepare workers.

"There is little doubt the construction industry will continue to recover in 2015," the report says. "Beyond adding to the hours of their current staff, firms appear to have the confidence needed to bring on new workers—if they can find them."

Ready to Hire Again: The 2015 Construction Industry Hiring and Business Outlook, - See more at: http://www.hanleywood.com/news-opinions/eighty-percent-construction-firms-plan-expand-headcount-2015#sthash.UnJRDzSS.dpuf

   

Tagged categories: Associated General Contractors (AGC); Business operations; Commercial Construction; Construction; Hiring; Infrastructure; Market forecasts; Residential Construction; Worker training; Workers

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