New AGC Report Shows How Much Work is Left to Get Construction Back to "Normal"

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Robison Wells

The Associated General Contractors of America's "2021 Construction Hiring and Business Outlook" report uncovers a significant post-pandemic slowdown. The information also doesn't predict a return to typical construction in 2021.

Of sixteen sectors analyzed, researchers found that thirteen would experience hiring declines during the upcoming year. Only healthcare, warehousing, and water/sewer showed gains.

The report, which surveyed 1,300 construction firms in November and December, found that contractors were having trouble finding new projects and struggling to keep existing contracts.

"2021 looks to be a difficult year for many construction firms," said Stephen Sandherr, AGC's CEO, during a broadcast webinar. "The pandemic is prompting many projects to be postponed or canceled, forcing contractors to take longer to build projects and increasing the cost of construction."

The hardest-hit sectors include retail (down 61%), lodging (down 58%), private offices (down 58%), higher education (down 40%), and public buildings (down 38%). Many schools, infrastructure projects, and transportation endeavors also made the losing list.

The report also said that finding skilled labor continues to be a significant problem. As one Florida-based construction owner, Bob Schafer of Ranger Construction Industries, puts it: "Someone suggested to me that now that all these people now are unemployed, I should have no problem finding folks," Schafer said. "But you can't put a bartender or a waitress on a motor grader."

Material costs also make the list, particularly cement, steel, asphalt, and aggregates.

In a recent webinar, Rosana Biondo, president of Mark One Electric Company, ended with a well-needed pep talk. "We're going to have a challenging year," Biondo told participants. "But I'm a contractor who's been in business a long time, and you can find work. It's your job to find work. It's my job to make sure I work my team. So we dig in deep."

Contractors find themselves in a difficult situation with slowdowns in new construction projects and cancellations of existing projects. According to the Associated General Contractors of America, a long road lies ahead before the construction industry returns to pre-pandemic business as usual.

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