Contractors remain optimistic about market but have concerns about workforce.
Contractors are feeling generally good about the commercial construction market according to the Q3 2018 Commercial Construction Index from USG Corporation and the U.S. Chamber of Commerce.
Nearly all respondents (98 percent) expressed high or moderate confidence that the market will provide sufficient new business opportunities in the next 12 months; 69 percent of general contractors believe they will see revenue growth during that same period and 97 percent expect profit margins to either increase or remain the same.
But the continuing lack of skilled workers is casting shadows over the mostly sunny outlook.
Contractors were already having difficulty completing work on schedule because of the skilled labor shortage. Now they’re reporting that the shortage is impacting jobsite safety. In fact, 58 percent of respondents say a lack of workers with sufficient skills is the number one factor increasing safety risks. Even more (62 percent) believe it will be the top factor in the next three years.
Shorter schedules emerged as the number two factor — and tightened timelines only exacerbate the first problem. The report notes that aggressive schedules may force contractors to use workers who have less experience and training than they’d like (and push employees to work longer hours).
The percentage of contractors who report difficulty finding skilled workers has now been above 50 percent for six straight quarters. In the current report, 94 percent of contractors say they are finding it difficult or moderately difficult to get the skilled workers they need, up from 91 percent in Q2. More than half (55 percent) report a high degree of concern about workers’ skill levels, up 5 percent from the previous quarter.
Almost all respondents believe the problem of finding adequately skilled workers will either stay the same or get worse in the next six months.
Responses varied by region, with concerns about safety risks from the lack of skilled workers highest among contractors in the West. Those in the West and Northeast also identified language barriers as a major safety risk.
To reduce safety risks caused by workforce shortages, contractors are using a variety of strategies, including:
- Improving the safety climate on jobsites (63 percent)
- Improving the firm’s safety culture (58 percent)
- Providing more leadership training for supervisors (48 percent)
- Tracking and assessing safety records (34 percent)
- Using safety-enhancing technologies (33 percent)
GCs in the Northeast are relying more than others on leadership training for supervisors. And 47 percent of large contractors are using safety-enhancing technology, though only 27 percent of small contractors are.
What factor improves a company’s safety culture the most, according to the majority of respondents? Safety training at all levels, followed by ensuring accountability for safety at all levels. More GCs (58 percent) consider empowering and involving employees in safety programs to be highly effective than do trade contractors (35 percent). Similarly, more GCs (55 percent) feel that demonstrating management commitment to safety is among the practices with the greatest impact, vs. 34 percent of trade contractors.
Four out of five respondents (80 percent) say that having a solid safety program also delivers competitive advantages. Most large contractors (65 percent) report that their safety programs deliver either major or moderate competitive advantages due to factors including reduced insurance costs, reduced liability, improved ability to contract new work and improved industry standing.
Freelance writer Mary Lou Jay writes about business and technical developments in a variety of industries. She has been covering residential and commercial construction for more than 25 years.