80% of US Construction Firms Plan to Increase Payrolls in 2015

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80% of US construction firms plan to expand their payrolls in 2015, while only 7% expect to reduce headcounts according to a new survey released yesterday by the Associated General Contractors of America.

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The AGC’s Construction Hiring And Business Outlook shows that 80% of contractors expect to increase hiring this year. Source: AGC of America

The report says that most contractors are optimistic about the year ahead and ready to expand, but will have to cope with challenges including worker shortages and regulatory burdens.

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“Contractors are extremely optimistic about the outlook for 2015,” said Stephen E. Sandherr, AGC’s CEO. “Indeed, if their predictions prove true, industry employment could expand this year by the most in a decade.”

Sandherr noted that the number of firms planning to add employees—80%—in 2015, is significantly higher than in 2014, when only 57% of firms report they added to their total headcount. However, many firms that plan to hire this year expect to make only modest increases, with 90% of the firms that expect to add employees reporting they will expand by one-quarter or less this year.

23 states had large enough survey sample sizes to have individual breakdowns. 95% of firms in Virginia plan to expand their payrolls in 2015, for example, more than in any other state. 15% of firms in Utah report they plan to reduce headcount this year, more than in any other state.

A growing demand for private-sector construction is the biggest driver of 2015 expansion, association officials noted. Contractors are most optimistic about the retail/warehouse/lodging sector, with the difference between optimists and pessimists—the net positive reading—at 33%.

Contractors are also optimistic about the manufacturing, private office and energy construction segments, with net positive readings of 26%, 25%, and 24%, respectively.

Contractors are just as optimistic about some public sector construction segments, especially those that aren’t entirely dependent on federal funding. Contractors gave the outlook for water and sewer construction a new positive of 24%. They gave the highway market a net positive reading of 16% and the higher education sector 15%.

Contractors are less optimistic about the outlook for 2 market sectors that rely almost exclusively on federal funding—marine construction and direct federal construction. There was a net negative reading of 6% for marine construction and a net negative of 16% for the direct federal construction segment.

 

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