Painting a broader picture of 2022, the general mindset is one of optimism as construction contractors expect increasing demand for various types of projects, despite ongoing supply-chain and labor challenges.
“Contractors are, overall, very optimistic about the outlook for the construction industry in 2022,” says Stephen E. Sandherr, the Associated General Contractors of America chief executive officer. “While contractors face challenges this year, most of those will be centered on the need to keep pace with growing demand for construction projects.”
Recent surveys conducted by AGC, the Associated Builders and Contractors and Wells Fargo Equipment Finance Construction Group show renewed optimism among contractors and distributors for increasing profits and new equipment sales this year.
“The last two years have become increasingly unpredictable, due in large part to the coronavirus and public officials’ varied reactions to it,” says Ken Simonson, AGC chief economist. “Assuming current trends hold, 2022 should be a relatively strong year for the construction industry.”
ABC Chief Economist Anirban Basu says the big picture is the average construction firm in America is busy. “Despite the omicron variant, ongoing supply-chain issues, elevated energy and materials prices, and rampant staffing shortages, the average nonresidential contractor remains upbeat,” he says. “Perhaps the most remarkable aspect of the (ABC's) survey findings is the expectation that industry profit margins will expand during coming months, implying that contractors expect to pass along enough price increases to project owners to countervail the rising costs of construction service delivery.”
From an outside perspective, the general opinion would be that the construction industry is euphoric heading into 2022 or, then again, maybe not.
“We are still in an unbalanced economy where supply can’t keep up with demand,” Basu says. “The supply chain is broken, meaning transportation costs are up.There are not enough ships to transport goods and not enough truck drivers, so if you’re a manufacturer and you can’t get product to the market, why manufacture in the first place?”
