Construction Firms Optimistic About 2025, But Worried About Labor and Materials Prices
The report shows that contractors are very bullish about the prospects for data centers, water and sewer projects, power projects, and healthcare construction. They also have positive expectations for manufacturing plant construction, education, and lodging. However, they are less optimistic about warehouse, multifamily residential, private office, and retail projects.
Contractors are also concerned about supply chain disruptions, volatile affordable housing quotas, and technical regulatory requirements. They are worried that these factors could lead to increased construction costs and project delays.
Despite these concerns, contractors are planning to increase investments in artificial intelligence and other technologies to boost productivity. They are also focusing on better evaluating their firm's culture, expanding markets, adopting innovation, upskilling workers, and streamlining succession planning.
However, contractors are facing significant labor shortages and rising labor costs. More than three out of four firms report having a hard time filling either hourly craft positions or salaried openings. They are also worried about the impact of President-elect Trump's trade and immigration policies on the construction industry.
To address these challenges, contractors are implementing various strategies, such as upskilling and reskilling their workforce, promoting trade careers in communities and schools, and investing in internal training to attract and retain talent. They are also exploring flexible work arrangements to accommodate workers' personal needs and improve work-life balance.
Contractors are urging the new administration to work with Congress to establish new programs for temporary work visas dedicated to the construction industry. They are also urging President Trump to pass the Stronger Workforce for America Act, which boosts funding for post-secondary construction training programs, and to boost funding for high-school construction training programs.
They are also urging President Trump to revoke President Biden's executive order imposing project labor agreements for any federal construction project worth $35 million or more. They are also urging the president to be sparing in his imposition of new tariffs and to implement many of the measures to streamline permitting that Congress authorized but President Biden largely ignored.
“It will be a good year for the construction industry if the Trump administration works with us to find a way to address materials shortages, avoid materials price inflation, remove limits on who can work on federal projects and streamline the permitting process,” said Jeffrey Shoaf, the association’s chief executive officer.