Labor shortages have made construction firms less optimistic, according to the USG + U.S. Chamber of Commerce Commercial Construction Index.
To address the labor shortage, over 70% of contractors say they anticipate increasing usage of technology in the coming years to improve project delivery and labor productivity.
This quarter, 89% of contractors report having at least a moderate level of difficulty finding skilled workers – a finding that has been consistent since the launch of the Index. As a result, contractors say they are asking skilled workers to do more, are challenged to meet schedule requirements, and are putting in higher bids for projects.
“The commercial construction industry is a barometer of the broader economy and contractors are indicating slowing economic and investment activity. As we look to 2020, it is clear that to keep the industry and economy growing, we must address our current workforce challenges,” said Neil Bradley, U.S. Chamber of Commerce EVP- chief policy officer. “We need bipartisan policy solutions from Washington that promote practical and reasonable solutions and better prepare America’s workforce for the jobs of today and tomorrow.”
To address concerns over worker skill levels and availability, the construction industry – historically slow to digitize – is embracing technologies like drones, equipment tagging and augmented/virtual reality to improve project delivery. In fact, 60% of contractors already report using select technology on the job site, up six points year-over-year, and 80% believe they will be using one of these technologies by 2022.
When asked about the benefits of investing in advanced technologies, most contractors indicated it will improve safety, productivity and meet or reduce project schedules. These numbers are all up year-over-year by at least 12 points.
“The construction industry is changing more rapidly than ever before and advanced technologies present a big opportunity to work smarter, faster and safer – especially when there are millions of construction jobs unfilled,” said Christopher Griffin, president and CEO of USG Corporation.
While the overall score this quarter, 71, is lower than previous quarters, it is in comparison to what has been a boom market since the Index launched in 2017. The instability between Q3 and Q4 might indicate greater uncertainty among contractors about what to expect from the construction market.
The Index comprises three leading indicators to gauge confidence in the commercial construction industry, generating a composite index on the scale of 0 to 100 that serves as an indicator of the health of the contractor segment on a quarterly basis.