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AGC survey: Industry employment outlook improving

Mark Chavez (second from right) waits in line to register at a career fair in San Diego recently. A survey by AGC of America found more construction companies plan to hire in 2011. (AP File Photo/Gregory Bull)

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 released Monday by the Associated General Contractors of America 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.

Stephen Sandherr, the association’s chief executive officer, noted that while 55 percent of firms laid off staff and only 20 percent of firms added employees in 2010, the outlook is more positive for 2011. He said that 27 percent of construction firms nationwide report they plan to add staff in 2011 while only 20 percent 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.

In Wisconsin, 46 percent of firms say they plan to hire in 2011, while 45 percent said they were planning layoffs.

VIEW WISCONSIN’S SURVEY RESULTS

Despite the improving employment outlook, more contractors expect the nationwide construction market to shrink in 2011 than expect it to grow, according to the AGC. Contractors are most pessimistic about the private office market, where 56 percent expect activity to decline, followed by the retail, warehouse and lodging market, where 52 percent expect less activity.

Contractors are most optimistic about the hospital and higher education market, where 32 percent expect growth, and the power market, where 29 percent expect growth. However, even for those markets, 36 percent of contractors expect the hospital and higher education market to shrink and 32 percent expect the power market to contract.

The dour market outlook appears to be affecting demand for new construction equipment. Only 28 percent of firms report plans to purchase new construction equipment in 2011, down from the 34 percent that reported purchasing equipment last year.

Investment levels among the firms planning to buy equipment appear to be heading up, however. Firms report plans to spend nearly $900,000 on average for new equipment, up from an average of $671,000 last year.

Bid levels will remain very competitive this year. According to the survey results, 29 percent of firms report they plan to lower bid levels in 2011. That follows a year when 74 percent of firms reported lowering bid levels, including seven percent that reported lowering bid levels to the point they lost money performing the work.

The outlook was based on survey results from nearly 1,300 construction firms from 49 states, the District of Columbia and Puerto Rico. Contractors from every segment of the industry answered more than 30 questions about their hiring, equipment purchasing and business plans.

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