California contractors are feeling optimistic about their prospects for 2018, but many are struggling to recruit enough skilled workers, according to a report from the Associated General Contractors of America (AGGA).
“Expecting Growth to Continue: The 2018 Construction Industry Hiring and Business Outlook,” shows that 75 percent of construction firms nationwide plan to expand their payrolls in 2018, based on the feeling that economic conditions will remain strong as tax rates and regulatory burdens fall.
“Construction firms appear to be very optimistic about 2018 as they expect demand for all types of construction services to continue to expand,” AGCA CEO Stephen E. Sandherr, the association’s CEO, said in a statement. “This optimism is likely based on current economic conditions, an increasingly business-friendly regulatory environment and expectations that the Trump administration will boost infrastructure investments.”
The survey says that 60 percent of California contractors who were polled said they expect the available dollar volume of projects they compete for this year to be higher, and 33 percent expect to hire more than 25 new employees this year, the Orange County (OC) Register has reported.
The majority of contractors (62 per cent) say they are having a hard time filling both salaried and craft worker positions, while 57 percent expect the trend to continue through the year.
Another 19 percent figure they’ll boost their payrolls by 11 to 25 additional workers, 25 percent plan to add one to 10 new employees and 16 percent expect their staffing to remain the same. Another 6 percent anticipate staffing cuts.
Despite their hiring plans, 62 percent said they are having a hard time filling both salaried and craft worker positions, and 57 percent expect that trend to continue throughout this year.
Guy Hazen, who owns Construction Owl, an Encino business specializing in home remodeling services, is among the contractors scrambling to find enough skilled craft workers, the OC Register reported. Those hourly employees include carpenters, electricians, ironworkers and crane operators, among others.
“That’s because there’s a boom in the industry and there are lots of projects going on,” Hazen was quoted as saying. “Almost everyone is busy. Real estate demand is very high and interest rates are still low so people can pull money from their home equity to fix up their homes.”
The report shows that 60 percent of the construction firms that were polled increased their base pay in 2017 to help recruit and retain workers, while 21 percent paid more overtime and 25 percent provided incentives or bonuses.
Bill Holman, vice-president of land development for Christopher Homes and for Rosedale Land Partners — developing 1,250-home Rosedale community in Azusa — said California builders still face significant challenges.
“With regard to the mood about lifting controls or restrictions … that doesn’t apply to California,” the newspaper quoted him as saying. “Things remain very heavily regulated here for development and growth, and we’re seeing that labor markets are pretty tight.”
Holman said contractors are having a hard time find enough skilled workers. But Christopher Homes, he said, doesn’t plan to expand its staffing this year.
“Finding new development projects in Southern California is pretty tough these days,” Holman said. “Opportunities are scarce and it takes considerable capital and resources to acquire land and entitle it. We’ll hopefully pick off a few opportunities this year — you kind of take them where you find them.”