Construction firms plan to hire, not cut, workers

More construction firms are planning to hire workers this year than are planning to make layoffs, according to a survey released by the Associated General Contractors of America and Navigant.

While 55 percent of firms laid off staff and only 20 percent of firms added employees in 2010, the outlook is more positive in 2011, with 27 percent of construction firms planning to add staff and 20 percent planning to lay off workers. Among the 26 states with large enough survey sample sizes, 45 percent of firms in Iowa plan to hire – more than in any other state. Those firms plan to hire an average of 5 employees each, 21 percent of their workforce. Only five percent of Iowa firms plan layoffs.

Meanwhile, 48 percent of firms in Idaho plan layoffs this year, the highest percentage of any state. For more information, view all of the state-by-state survey results.

Despite the improving employment outlook, more contractors expect the construction market to shrink in 2011 than expect it to grow. Contractors are most pessimistic about the private office market, where 56 percent expect activity to decline, followed by the retail, warehouse and lodging market, where 52 percent expect less activity. Contractors are most optimistic about the hospital and higher education market, where 32 percent expect growth and the power market, where 29 percent expect growth.

Contractors’ low expectations may be driven by the fact most firms expect stimulus-funded construction activity will decline this year. Clear majorities of firms (ranging from 56 percent to 66 percent) expect stimulus spending in every market segment to decline in 2011. Meanwhile, only 30 percent of firms report they plan to perform stimulus-funded work this year, down from the 45 percent that reported performing stimulus-funded work in 2009 or 2010.

The outlook, which the association co-sponsored with expert services firm Navigant, was based on survey results from nearly 1,300 construction firms from 49 states, the District of Columbia and Puerto Rico. Contractors from every segment of the industry answered more than 30 questions about their hiring, equipment purchasing and business plans. Economists and specialists from the association and the firm analyzed those comments to craft the outlook.

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View the 2011 Construction Hiring and Business Outlook report and survey results.