More Construction Firms Plan to Hire Rather Than Cut Workers in 2011

More construction firms are planning to hire workers this year than are planning to make layoffs

More construction firms are planning to hire workers this year than are planning to make layoffs, according to the results of an industry-wide survey recently released by the Associated General Contractors of America (AGC) and Navigant. The survey, conducted as part of the Construction Industry Hiring and Business Outlook, shows the industry may finally be emerging from a severe downturn that has left millions of skilled workers unemployed.

Steven Sandherr, the association’s CEO, notes that while 55% of firms laid off staff and only 20% of firms added employees in 2010, the outlook is more positive for 2011. He says that 27% of construction firms report they plan to add staff in 2011 while only 20% report plan layoffs. Even more positive, expanding firms plan to hire an average of 23 employees while contracting firms plan to lay off an average of 16 employees.

Among the 26 states with large enough survey sample sizes, 45% of firms in Iowa plan to hire, more than in any other state. Those firms plan to hire an average of five employees each, 21% of their workforce. Only 5% of Iowa firms plan layoffs. Meanwhile, 48% of firms in Idaho plan layoffs for this year, the highest percentage of any state. Those firms plan to lay off an average of 12 employees each, 11% of their workforce. Only 14% of Idaho firms plan to hire. (View state-by-state survey results.)

Despite the improving employment outlook, more contractors expect the construction market to shrink in 2011 than expect it to grow. Contractors are most pessimistic about the private office market, where 56% expect activity to decline, followed by the retail, warehouse, and lodging market, where 52% expect less activity. Contractors are most optimistic about the hospital & higher education market, where 32% expect growth, and the power market, where 29% expect growth. However, even for those markets, 36% of contractors expect the hospital & higher education market to shrink, and 32% expect the power market to contract.

Contractors' low expectations may be driven by the fact most firms expect stimulus-funded construction activity will decline this year. Clear majorities of firms (ranging from 56% to 66%) expect stimulus spending in every market segment to decline in 2011. Meanwhile, only 30% of firms report they plan to perform stimulus-funded work this year, down from the 45% that reported performing stimulus-funded work in2009 or 2010.

View the 2011 Construction Hiring and Business Outlook report. View the survey results.

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