The Associated General Contractors of America (AGC) said Monday that significantly more construction firms are planning to add new staff than plan to cut staff while demand for many types of private sector construction projects should increase this year according to survey results released today by the AGC and Computer Guidance Corporation. The survey, conducted as part of Tentative Signs of a Recovery: The 2013 Construction Industry Hiring and Business Outlook, provides a generally optimistic outlook for the year even as firms worry about rising costs and declining public sector demand for construction.
"While the outlook for the construction industry appears to be heading in the right direction for 2013, many firms are still grappling with significant economic headwinds," said Stephen E. Sandherr, the association's chief executive officer. "With luck and a lot of work, the hard-hit construction industry should be larger, healthier, more technologically savvy and more profitable by the end of 2013 than it is today." He said that 31 percent of firms plan to add staff this year, while only 9 percent plan to make layoffs this year. The scope of those staff additions are likely to be modest, however, with 79 percent of firms reporting they plan to hire 15 or fewer people in 2013 and only 13 percent planning to hire more than 25 new workers this year.
Unfortunately, there are almost as many causes for concern as there are signs of optimism," said Ken Simonson, the association's chief economist. "Demand for public buildings is set to decline, manufacturing work appears to be slackening, materials prices and health care costs continue to rise and many firms are reluctant to make major investments in new equipment."
Simonson noted that overall demand for new construction equipment is likely to remain modest in 2013: 64 percent of firms plan to purchase new equipment this year, down from 70 percent last year, while 77 percent of firms plan to lease this year compared to 78 percent in 2012. Contractors are increasingly relying on leasing equipment to avoid having to pay for idle equipment during lags in construction activity, Simonson noted. Even as they shift toward more leasing, firms' appetite for new equipment remains modest, with two-thirds of the firms planning to buy and 73 percent planning to lease $250,000 or less in equipment this year.
