80% of Construction Firms Plan to Expand Headcount in 2015 Andreas Karelias/iStock/Thinkstock

80% of Construction Firms Plan to Expand Headcount in 2015

Firms in Virginia Lead Other States in Hiring Optimism; Most Firms Expect Growth this Year, But Are Coping With Worker Shortages, Rising Health Care Costs and New Regulatory Burdens, New Outlook Finds

Eighty percent of construction firms plan to expand their payrolls in 2015 while only 7% expect to reduce headcounts according to survey results released by the Associated General Contractors of America. The survey, conducted as part of Ready to Hire Again: The 2015 Construction Industry Hiring and Business Outlook, indicates 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.

"Contractors are extremely optimistic about the outlook for 2015," said Stephen E. Sandherr, the association's chief executive officer. "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.

Among the 23 states with large enough survey sample sizes, 95% of firms in Virginia plan to expand their payrolls in 2015, more than in any other state. Meanwhile, 15% of firms in Utah report they plan to reduce headcount this year, more than in any other state. (View state-by-state survey results)

"Despite the overall optimism, some challenges remain for the industry," said Ken Simonson, the association's chief economist. "In particular, as construction firms continue to expand, they will continue to have a difficult time finding enough skilled construction workers."

Among respondents who are trying to hire workers, 87% report having a hard time filling key professional and craft worker positions. In particular, 76% of firms that are hiring report having a hard time finding qualified craft workers while 62% say the same about professional positions such as project managers, supervisors and estimators.

Simonson noted that as the supply of construction workers tightens, compensation levels appear to be rising. Fifty-one percent of firms report they have increased base pay rates to retain construction professionals and 46% have done the same to retain skilled craft workers. A quarter of firms report they have improved their benefits packages to retain construction professionals and one-in-five firms has done the same to retain craft workers.

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