That’s one of the results of the third-quarter Commercial Construction Index (CCI) released by the USG Corporation and the U.S. Chamber of Commerce, compiled by Dodge Data & Analytics.
“The commercial construction industry is growing but the labor shortage remains unresolved,” said Jennifer Scanlon, president and CEO of USG Corporation. “As contractors are forced to do more with less, a renewed emphasis on safety is imperative to the strength and health of the industry. It continues to be important for organizations to build strong and comprehensive safety programs.”
A recently released survey of construction companies done by the Associated General Contractors of America found that 80 percent of the firms surveyed were having a hard time filling craft worker/hourly positions and salaried jobs. That total is up from the 78 percent reporting difficulty in a January survey and up from 73 percent reporting the same in a January 2017 survey.
Other concerns affecting safety:
- Shorter construction schedules – 49 percent see that as a concern now and 47 percent for the next three years.
- Aging workers – 32 percent see that as a current concern, with 38 percent for the next three years.
- More complex projects – 25 percent now; 26 percent for next three years.
- Addiction issues – 22 percent now; 28 percent for next three years.
- Language barriers among workers – 20 percent now and for next three years.
The report also indicated that 55 percent of contractors have a “high concern” about adequate skill levels of workers, a 5-percent increase from last quarter.
Overall, the percentage of contractors reporting difficulty finding skilled workers is 57 percent, up 2 percent from last quarter.
The worker shortage and safety concerns don’t appear to be dampening contractors’ overall optimism.
The overall CCI moved up 2 points from the second quarter to 75.
A big driver of that increase has been a rise in work backlogs to 10.3 months – up from 9.3 months in the second quarter and up from 8.9 months in the first quarter. The ideal backlog is 12.7 months, according to the index.
Other factors that make up the index:
- Optimism about adding new business over the next 12 months dropped slightly to a rating of 74, down 1 point.
- A 3-point drop in optimism level over last quarter for expected revenue growth in the next 12 months, to 69.
The CCI also indicates that contractors’ concerns about Trump administration tariffs on steel has abated from the second quarter when 63 percent were “very concerned about cost fluctuations in steel.” The level dropped to 49 percent in the third quarter, but still higher than in the first quarter (35 percent) and the fourth quarter of 2017 (30 percent) before tariffs had been announced.
Contractors expecting a high degree of business impact from aluminum and steel tariffs also dropped from 58 percent last quarter to 51 percent this quarter. The skilled-labor shortage replaced tariffs this quarter as the top concern among contractors, at 57 percent.
