Continued growth is forecast for construction companies across the Midwest in 2019. New hospital, manufacturing, retail and lodging, highway, public infrastructure and school construction is expected to expand. The continued demand comes against the backdrop of a shrinking labor pool which have left many wondering how to cope with the dichotomy. The results of the 2019 Sage Construction Hiring and Business Outlook Survey,  provides a glimpse into the opportunities and challenges industry companies will face this year. According to the survey, 77% of Midwest companies expect to increase their headcount in the coming months, while 75% expect to have a hard time filling these new positions. The challenge has forced many companies to modify their recruiting strategies, increase pay, offer more benefits and increase training programs to boost productivity. The survey’s findings provide important insight into industry trends and steps being taken to accommodate the challenge.

About the Survey

The Midwest survey results are based on responses from 313 companies across the region including Illinois, Indiana, Ohio, Wisconsin, Minnesota, Missouri and Kansas. Besides general contractors, sub-contractors, architects, engineers, designers and material suppliers were participants. The survey was composed of 30 total questions covering issues from expected demand, growth opportunities and recruiting practices to IT spending and mobile technology integration.

Key Survey Findings

  • Dollar Volume of Projects – The surveyors wanted to get insights from Midwestern companies on the expected dollar volume of projects in 2019. It specifically asked about various project categories ranging from highway, public buildings and hospitals to water/sewer and residential construction. Results demonstrate that there is an expected 22% increase in hospital construction, 26% increase in water/sewer construction, 15% increase in manufacturing, 14% increase in private office, 12% increase in highway and 11% increase in power construction projects. What’s more interesting is of the 11 categories identified in the survey, none are expected to experience less than 2% growth. It’s clear the opportunities are abound for those positioned to take advantage.
  • Ability to Fill Positions – The ability to find qualified labor has been a challenge that construction companies continue to face. To understand if and how the problem will continue, the survey was asked about the ability to fill positions. According to the survey, 38% of respondents believe it will continue to be hard to find staff, 32% believe it will become harder, 26% expect no change and 1% believe it will become easier to hire. While there are mixed opinions on the level of difficulty, it’s clear that finding qualified labor will continue to present challenges to management.
  • Technology Integration – To get more from existing resources many companies are turning to productivity tools to empower employees. According to the survey, 29% of participants are using methods to reduce onsite work time (lean construction methods, BIM), 32% are using labor-saving equipment such as drones and 3-D printers, 18% have added specialists such as lean construction personnel or drone operators, and 35% have planned no changes over last year.
  • Biggest Concerns – While labor appears to be the most pressing concern, the survey wanted to find out what additional issues are on the minds of management. According to the survey, 29% indicated worker shortage, 12% are concerned about increased computation for projects, 9% are concerned about increasing federal regulations, 8% are concerned with increasing labor costs and 3% indicated increasing material and supply costs as chief concerns.
  • Safety Challenges – Maintaining workplace and job site safety is essential to the ability to keep insurance rates low and attract quality labor. The surveyors wanted to identify the top safety challenges facing companies. According to the survey, 46% are concerned regarding issues arising from an inexperienced labor force, 17% from poor subcontractor safety practices, and 6% from low quality of available safety training programs and materials available.
  • Training Investments – In seeking to get more productivity from employees, companies need to offer additional training. According to the survey, 62% of respondents plan to increase investments in training and development while 38% indicated they will stay the same. No respondents plan to decrease spending on training and development.
  • IT Investments – To understand how companies are using IT to enhance productivity and drive collaboration, the survey sought to understand how IT investments will change. According to the survey, 42% of respondents plan to increase spending on IT investments, 44% plan to keep spending the same, 2% plan to decrease spending while the balance is unsure how their investments will change.

Contact Us

The challenges and opportunities for construction companies continue to persist. The ongoing integration of technology and training reflect the industry’s attempt to find innovative ways to get more from existing resources. Whatever the method, it’s clear that management needs to stay focused on these initiatives. If you have questions about the survey, it’s findings or need assurance with a construction tax, audit or accounting issue, Barnes Dennig can help! For additional information call us at 317-572-1130 or click here to contact us. We look forward to speaking with you soon.