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Surveys Show Outlook Remains Cloudy

BY KEN SIMONSON, CHIEF ECONOMIST, AGC OF AMERICA

Two sets of recent survey results show contractors hold divergent views about the outlook for construction. Many firms are already back to “normal,” but a larger number expect recovery will take another half-year or more.

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The annual AGC of America-Autodesk Workforce in August received more than 2,000 responses from contractors in every state, while the Census Bureau has been conducting a weekly Small Business Pulse Survey since April. AGC and the Census Bureau each asked re-spondents how long they thought it would take for their business to return to its normal level of operations relative to one year earlier.

Twenty-nine percent of the respondents to AGC’s survey reported their business was already at or above year-ago levels, while 38 percent said it would take more than six months (from August) to get back to normal. Among construction-sector respondents to the Census Bureau’s September 6-12 survey, 40 percent reported either “little or no effect” on their normal level of operations (26 percent) or the business had returned to normal (14 percent). However, a similar share — 38 percent — reported either that it would take more than six months (32 per-cent) or that the business was not expected to return to normal (5 percent) or had permanently closed (1 percent).

The results are broadly consistent, especially after allowing for the difference in coverage. AGC’s survey was limited to AGC members — con-tractors performing every type of nonresidential construction and multifamily projects, but not single-family homebuilders. The Census surveys do include homebuilders, who are likely to have more positive expectations, based on the strong demand for both new homes and improve-ments.

Ominously, 60 percent of respondents to the AGC survey reported that an upcoming project had been postponed or canceled. That was nearly double the 32 percent who reported a cancellation in a survey AGC had conducted just two months earlier. Conversely, the share of respondents who reported winning new or expanded work as a result of the pandemic slumped to 12 percent, from 21 percent in June.


To view the results of the 2020 Workforce Survey Analysis, visit https://www.agc.org/sites/default/files/Files/Communications/2020_Workforce_Survey_Analysis.pdf.

Despite the increasing number of cancellations and postponements and the paucity of new projects, more contractors expect to add workers than to shrink their headcount over the coming year. Thirty-eight percent of the respondents to the AGC survey reported they expect their firm to add new employees over the next 12 months, while 24 percent expect to furlough or terminate employees. The remaining 38 percent expect headcount to remain unchanged. In the 2019 workforce survey, 72 percent of respondents had expected their firms to add workers in the next 12 months.

With fewer firms than before expecting to expand, worker shortages are less prevalent, but they are still a problem for many contractors. Just over half — 52 percent — of respondents to the 2020 survey reported difficulty filling an hourly craft position. But that was down from 80 percent of firms in the 2019 survey. In that survey, for all but one of the 20 crafts listed, at least half of the firms that sought to hire that type of worker reported difficulty. This year, none of the craft positions was listed as hard to fill by half or more of the respondents.

Taken together, the evidence from these surveys suggests fewer contractors than a year ago or even in mid-June are expecting to have more work to bid on or to add to their workforces in the next year. Yet firms that plan to hire more workers may still have trouble finding qualified candidates.