AGC's Simonson: Labor shortages could occur

Associated General Contractors of America’s Ken Simonson recently spoke at the 2014 Wholesalers Association of the North East (WANE) Executive Leadership Conference in Cambridge, Mass.  The following are his comments to the attendees as it related to workforce supply in the construction industry:  

Associated General Contractors of America’s Ken Simonson provided his comprehensive economic outlook. Simonson, AGC’s chief economist, noted a recent construction outlook survey shows two-thirds of respondents feel the overall construction market will improve the rest of the year and into 2015.

Simonson said the explosion of shale plays in the energy sector, expansion of the Panama Canal and a revival in the residential market are three positive trends being seen in the construction industry. Conversely, he noted government pullback on schools and infrastructure construction, consumer migration from brick-and-mortar to online buying and shrinking employer office space are three trends holding down construction growth.

Simonson also noted changes in consumers’ feelings about continuing education (resulting in lower college/university enrollments) and the emergence of non-traditional health-care facilities will affect education and health-care construction going forward.

Simonson added single-family home growth will continue to slow down by the end of the year, while multifamily construction’s positive momentum will go into 2015. “A preference for urban living adds to the demand,” Simonson said.

Simonson added the best construction prospects for 2014 include multifamily, manufacturing, oil and gas, pipelines, warehouses, lodging, rail and data centers. He also cautioned to keep an eye on the labor situation.

“Widespread labor supply shortages are possible due to retirements, competition from other sectors and fewer vets in the workforce,” he said.

Source: Supply House Times