2020 Construction Outlook: The Good, Bad, & the Ugly Challenge

The Associated General Contractors of America (AGC) and Sage recently released findings of their joint survey of nearly 1000 contractors. The summary reports an overall shared positive outlook, but also expectations of some reoccurring challenges growing worse.

"Contractors are very optimistic about demand for construction in 2020 despite
numerous signs the overall economy may be slowing. At the same time, many
construction executives are troubled by labor shortages and the impacts those shortages
are having on their operations, training & safety programs and bottom lines. Both the
optimism about workloads and the worry about worker availability cut across all regions,
project categories and types of contractors." (AGC Sage 2020 Construction Hiring & Business Outlook)

The Overall Good 

• This year more contractors are expecting market growth than decline across the nation.
• The majority of respondents (3/4) are planning to increase headcount in 2020.
• The Northeast shows the highest percent of contractors adding workers, but least optimism.
• The South shows the most optimism vs. the U.S. average on the value of projects.
• The West rates K-12 schools as the most favorable market in 2020, though overall is slightly less optimistic than respondents nationally.
• The Midwest as a region is also slightly less optimistic than their counterparts nationally.

The Lingering Bad

• All contractors in the study shared a major concern for continued labor shortage.
• As many as 81% of contractors are having a hard time filling positions.
• 72% of contractors report labor shortages among their biggest concerns for 2020.
• 75% cite worker quality as another major concern.
• Nearly 2/3 of contractors expect it will be hard or more difficult to hire personnel this year.
• 6 of the 8 top concerns for contractors were related to worker shortages, training and quality of work.
• 40% of firms are experiencing longer-than-expected project completion times.
• Close to 50% of respondents in the study say staffing challenges drove their costs higher than expected, and 41% are putting higher prices into new bids as a result.
• More than 1/5 of firms now quote longer completion times in both bids and contracts.

The Promise of IT

“Many firms are seeking to cope with labor shortages by adopting new, labor-saving technologies…Nearly half the firms expect to increase their investment in information technology (IT) in 2020, with the largest share planning to increase investments in project management software technology. And to collaborate with project partners, more than two-thirds of firms use file-sharing sites, nearly half use online project collaboration software, and about one-quarter use BIM. However, there are several IT challenges that were mentioned by at least one-third of respondents, especially the time needed to implement and train on new technology.”(AGC Sage 2020 Construction Hiring & Business Outlook)

The Ugly Reality

As many as 43% of construction firms say they don’t have the time needed to implement or train on new construction software systems. This is further worsened by understaffing due to the ongoing  industry-wide labor shortage. Other IT challenges mentioned in the AGC study include:

• Employee resistance to using new technology (cited by 38% of the firms).
• Trouble with communication between the field and office (36% reported this).
• Connectivity to remote job sites is a problem (reported by 35%).

On top of these barriers consider the eye-opening stat from a PlanGrid/FMI Study which reports that as much as 35% of construction professionals' time (about 14 hours per week) is wasted on looking for project information, or dealing with mistakes, conflict resolution and rework.

Getting Help

There's no question technology is a welcomed addition to construction. Planning software can be a big asset if integrated correctly to accomodate for inevitable data surges that follow new apps. But the steady increase in data requires more quality checking, closely-managed document control and well-synced communication to reduce risk. Most of this still demands careful human oversight. In the midst of a continuing labor shortage with a lack of tech-trained staff, many contractors are in need of professional assistance to realize the return on their construction software.  BarkerBlue can help with a ready staff of certified experienced project managers who are platform agnostic --trained in all today's popular construction planning software. We offer dedicated focus on your project data to reduce errors and rework and help ensure the project finishes on time.

See our video below for more on the construction data challenge and how BarkerBlue can help, or learn more at https://barkerbluebuild.com/.