US contractors have ‘mixed outlook’ for 2024

Construction contractors have mixed outlook for 2024, with expectations less positive than last year 

Construction workers Over 70% of respondents report they are having a hard time filling some or all salaried or hourly craft positions

US-based construction contractors are struggling to cope with significant labour shortages, the impacts of higher interest rates and input costs, and a supply chain that, while better, is still far from normal, according to survey results released by the Associated General Contractors of America and Sage.

Regarding different sectors, public sector, data center and manufacturing construction are expected to be positive and to offset declines in retail, lodging and office work.

Construction contractors have a decidedly mixed outlook for 2024 as firms predict transitions in demand for projects, the types of challenges they will face and the technologies, including artificial intelligence, they will embrace according to survey results in, A Construction Market in Transition: The 2024 Construction Hiring and Business Outlook.

“2024 offers a mixed bag for construction contractors: on one hand, demand for many types of projects should continue to expand and firms will continue to invest in the tools they need to be more efficient,” said Stephen E. Sandherr, the association’s chief executive officer. “Meanwhile, they face significant challenges when it comes to finding workers, coping with rising costs and weathering the impacts of higher interest rates.”

The net reading – the percentage of respondents who expect the available dollar value of projects to expand compared to the percentage who expect it to shrink – is positive for 14 of the 17 categories of construction included in the survey, as it was in 2023. However, a smaller share than previously expects the markets they compete in to expand in the coming year. The net reading decreased from the 2023 survey for nine project types, increased for six types, and remained unchanged for two.

The highest net positive reading in the 2024 survey (32%) is for water and sewer construction. The net reading for federal projects is 29% and the highest expectation among predominantly private-sector categories is for power projects, with a net reading of 25%.

Data center construction 

The largest increase in optimism from the previous survey is for data center construction, with a net positive reading of 20%, up from 12% a year ago.

“On balance, contractors remain upbeat about the available dollar value of projects to bid on in 2024. But the optimism regarding opportunities for most project types is less widespread than it was a year ago,” said Ken Simonson, the association’s chief economist. 

Simonson noted that more than two-thirds (69%) of the respondents expect to add to their headcount, compared to only 10% who expect a decrease. While just under half (47%) of firms expect to increase their headcount by 10% or less, nearly one-quarter anticipate larger increases.

However, 77% of respondents report they are having a hard time filling some or all salaried or hourly craft positions. The majority (55%) expects that hiring will continue to be hard (35%) or will become harder (20%).

Most firms took steps in 2023 to attract and retain workers. Over 60% increased base pay rates more than in 2022. Additionally, 25% of firms provided incentives or bonuses and 24% of the firms increased their portion of benefit contributions and/or improved employee benefits.


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Andy Brown Editor, Editorial, UK - Wadhurst Tel: +44 (0) 1892 786224 E-mail: [email protected]
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