AGC: 2013 Should Be A Good Year for Construction Industry

Significantly more construction firms are planning to add new staff than plan to cut staff while demand for many types of private sector construction projects should increase this year according to survey results released today by the Associated General Contractors of America and Computer Guidance Corporation. The survey, conducted as part of Tentative Signs of a Recovery: The 2013 Construction Industry Hiring and Business Outlook, provides a generally optimistic outlook for the year even as firms worry about rising costs and declining public sector demand for construction.

AGC 2013 Outlook: National Survey Results

“While the outlook for the construction industry appears to be heading in the right direction for 2013, many firms are still grappling with significant economic headwinds,” said Stephen E. Sandherr, the association's chief executive officer. “With luck and a lot of work, the hard-hit construction industry should be larger, healthier, more technologically savvy and more profitable by the end of 2013 than it is today.”

Podcast: How the 2013 Construction Industry Looks in California

Podcast: How the 2013 Construction Industry Looks in Texas

Construction employment

Sandherr noted that significantly more firms are planning to add staff this year compared to the number of firms expecting to make layoffs. He said that 31 percent of firms plan to add staff this year, while only 9 percent plan to make layoffs this year. The scope of those staff additions are likely to be modest, however, with 79 percent of firms reporting they plan to hire 15 or fewer people in 2013 and only 13 percent planning to hire more than 25 new workers this year.

Among the 30 states with large enough survey sample sizes, 56 percent of firms in Maryland plan to hire new staff this year, more than in any other state. Only 14 percent of firms in South Carolina plan to add staff this year, the least amount in any state.

Meanwhile, 37 percent of firms in Michigan plan layoffs for this year, the highest percentage of any state. No firms working in Maryland reported plans to make layoffs this year.

State by state survey results

Public vs private growth

Contractors appear increasingly optimistic that demand for certain private sector projects will expand this year, Sandherr noted. Firms are most optimistic about the outlook for hospital and higher education construction, he said, noting that 36 percent of firms predict the amount of money spent on those projects will grow in 2013 while 39 percent of firms expect the market will remain stable compared to last year.

Combined 2013 Construction Economic Outlooks Point to Project Hot Spots

Contractors were also optimistic about the markets for power construction but had lower expectations for manufacturing, private office and retail, warehouse and lodging construction.

Meanwhile, contractors expect demand for many types of public construction will decline in 2013. For example, 40 percent of contractors report they expect demand for public buildings to shrink in 2013 while only 18 percent expect that market to grow. Another 37 percent of contractors report they expect demand for K-12 school construction to shrink while only 20 percent expect it to increase. And 35 percent of contractors expect the market for manufacturing facilities to shrink this year, while only 23 percent predict it will expand.