Construction Industry Expected to Boast Nearly $1.2 Trillion Output by 2020

by Sandy Griffis, Executive Director, Yavapai County Contractors Association

It is an interesting time for our construction industry. Growth has been strong over the past couple of years in our jurisdiction. Having weathered the Recession of 2008, aka the Recession of the late 2000s, aka the Great Recession, which was by far the worst recession since the Great Depression of the 1930s, our construction industry is still facing challenges.

What would you think are the top four challenges facing our industry?

Of course rising material and labor costs, labor woes, increased competition and shrinking profit margins are just some of the challenges our local construction companies are facing. And then on top of those items there are always new rules and regulations like OSHA rules or changes to building codes. But the top four:

1. Shortage of qualified workers

The construction industry has been on the rise for the past few years, which we can see with permit issuance and new roof tops. Despite this growth, more than 50% of our local construction companies say they are having a tough time finding workers to fill these growing positions.

Not to be “Debbie Downer,” but the skilled-employee shortage is growing. Parents prefer four-year schools. The phenomenon of the 1990s still exists today: Parents push their children toward four-year degrees. In many instances, though, a young person would be better served learning a construction trade that offers great career opportunity with super pay.

I am a firm believer we need to start to recruit and reach out to students in middle school. These young minds need construction industry exposure now!

The labor shortage is creating project delays and driving up prices. The U.S. Bureau of Labor Statistics sees a 13% growth rate in the construction sector through 2024, creating approximately 180,000 jobs in the process. If you add in a conservative replacement rate for retiring baby boomers, you get a total of approximately 458,000 jobs coming online in the next decade that construction companies will need to fill.

Our industry needs to do a better job at hiring military veterans. Construction industry companies that can effectively recruit, assimilate and retain veterans into their organizations can make great strides in closing the skilled-labor gap.

By looking at the building industry as offering lucrative, abundant and fulfilling professions, and by helping young people prepare to step into these jobs, we offer them viable careers that come with flexibility, no college loans and long-term sustainability.

2. Generational Differences

Old guard versus new guard. The veterans versus the young adults. More and more millennials are entering the job force who have very different work ethics, skills, mindset and opinions and also have technology DNA on how to implement new ideas versus the traditional old-fashioned way of work.

3. It is Not Easy Being Green

Environmental sustainability, water conservation, energy consumption, new building products and materials are commanding a new approach to building. Everyone now needs to take steps to take care of our environment.

4. Design/Build Intricacy

Construction projects are becoming more demanding and complicated in the design, and this makes it a little tough for companies without a strong workforce because they do not have the staff to take on multitiered projects. Contractors are becoming more selective in what projects they choose to accept.

I want to say that the construction industry is booming and experts expect growth to continue. The Bureau of Labor Statistics and a report from Timetric’s Construction Intelligence Center (CIC) project the construction industry to be one of the fastest growing industries into 2020.

With increased work, the construction industry will have a higher employment rate than the overall economy. Construction has a 4.5% projected growth rate over the next several years, making construction staffing the leading industry in wage and employment growth.

Professionals predict the construction industry will have one of the largest increases in real output, reaching almost $1.2 trillion by 2020.

The U.S. population is expected to grow from 321.2 billion to 338 billion in the same timeframe. This increase of people results in a rise of residential housing as well. This will escalate residential construction to the top of the growing markets’ list.

Commercial construction will also continue to grow. With more consumer spending and governmental investments in tourism, office buildings and retail space, commercial construction businesses will reap the rewards.

So here are five great reasons why to get into construction:

  • there are jobs
  • the money is fantastic
  • you can build a lifelong career
  • you won’t get bored
  • you get to work in the best, most amazing and awe-inspiring industry, with awesome people and have the love and support of YCCA!