The Associated Genral Contractors of America (AGC) recently released its 2014 construction hiring and business outlook. Below are the top 5 take-aways from this report:
- Contractors are optimistic
- Markets will expand
- Hiring will increase
- Credit restraints will be loosed
- Capital spending will go up
Contractors are optimistic
Overall, the report released by the AGC contained relatively good news, something the construction industry has been lacking the better part of the last decade.
Overall, the report released by the AGC contained relatively good news, something the construction industry has been lacking the better part of the last decade.
Every market will grow or remain stable
The biggest increase in demand will come from construction in the manufacturing industry; the retail and warehouse sectors; the lodging sector; and hospital and higher education industries.
The biggest increase in demand will come from construction in the manufacturing industry; the retail and warehouse sectors; the lodging sector; and hospital and higher education industries.
Hiring will increase
The double-edge sword of good news is that although many contractors expect growth in 2014, a lack of skilled construction workers in the market could present a serious problem. Owners and developers are finally investing in new construction projects; however, many contractors have slimmed down to only essential personnel over the past few years, eliminating many skilled workers. Now that demand is ramping up from developers, contractors are scrambling to hire dependable, skilled workers.
The double-edge sword of good news is that although many contractors expect growth in 2014, a lack of skilled construction workers in the market could present a serious problem. Owners and developers are finally investing in new construction projects; however, many contractors have slimmed down to only essential personnel over the past few years, eliminating many skilled workers. Now that demand is ramping up from developers, contractors are scrambling to hire dependable, skilled workers.
Obtaining credit will be easier
Just like the rest of the economy, the construction industry will have less red tape to cut through when applying for new credit in 2014. It makes perfect sense though, if the rest of the industries in the country are looking to expand, they will need the construction industry to meet their demands. If the construction industry does not have access to new credit, they will not be able to meet the needs of other industries.
Just like the rest of the economy, the construction industry will have less red tape to cut through when applying for new credit in 2014. It makes perfect sense though, if the rest of the industries in the country are looking to expand, they will need the construction industry to meet their demands. If the construction industry does not have access to new credit, they will not be able to meet the needs of other industries.
Capital spending will go up
The expression "to make money, you have to spend money" will be evident most notably in capital expenditures budget line for construction companies. With more jobs expected to be won in 2014, contractors will need to invest in themselves to keep up with the demand. Contractors will invest not only in their people resources but also other resources, such as equipment and tools.
The expression "to make money, you have to spend money" will be evident most notably in capital expenditures budget line for construction companies. With more jobs expected to be won in 2014, contractors will need to invest in themselves to keep up with the demand. Contractors will invest not only in their people resources but also other resources, such as equipment and tools.
What does this mean for the real estate industry?
With construction production expected to increase, real estate professionals will have more inventory to manage (meaning better pricing for buyers.) However, if contractors cannot keep up with demand, inventory of new properties will remain at current low levels (meaning better pricing for sellers.) Ideally, the market will find its balance and create a more suitable market for real estate in 2014.
With construction production expected to increase, real estate professionals will have more inventory to manage (meaning better pricing for buyers.) However, if contractors cannot keep up with demand, inventory of new properties will remain at current low levels (meaning better pricing for sellers.) Ideally, the market will find its balance and create a more suitable market for real estate in 2014.
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