April 5, 2018

2018 Georgia Construction Trends

Managing a successful construction company can be challenging. The lifecycle of projects can take several years from the initial proposal through final delivery. All the steps that happen in between can make the difference between making a profit or accepting a loss. The job of managing resources, labor, materials, scheduling equipment and managing change orders all figure into the profitability formula.

Beyond the basics, management needs to be aware of the latest trends, challenges and opportunities to properly position their company for continued success. For insight into how do that that, companies can turn to the recently released Associated General Contractors of America 2018 Construction Outlook Survey – Georgia Results. The study surveyed various construction companies and contractors from throughout the state to understand the key employment and staffing issued faced. To help clients, prospects and others, Wilson Lewis has provided a summary of the results below.

About the Survey

A total of 48 Georgia companies participated in the survey ranging in employee size from $10 million in revenue to more than $100 million. Of those who responded, 26 percent earned less than $10 million in revenue in 2017 while 15 percent earned more than $100 million. The types of companies that participated in the survey included general contractors, construction managers specialty or subcontractors, service providers and architects, engineers and designers; 6 percent of respondents classified themselves as others.

Key Findings

• Top Concerns in 2018 – While the construction industry continues to do well, the need for qualified labor appears to be a top concern for companies. According to the survey, 55 percent of respondents indicated that worker shortages is their top concern. This was followed by compensation for projects (32 percent), internal company process inefficiencies (29 percent), rising indirect labor costs, such as training and recruiting (25 percent) and safety (20 percent). Other issues identified include increasing regulations, rising subcontractor costs and concerns about worker quality.

• Continued Growth: Most respondents expect to experience additional growth in 2018:
  • 7 percent indicated they plan to increase their headcount by more than 25 percent.
  • 36 percent plan to increase their headcount between 11 and 25 percent.
  • 34 percent plan to increase headcount by 11-10 percent.
  • No companies participating in the survey indicated they were going to decrease their headcount.

• Current Hiring Conditions: The need for qualified and well-trained labor has been a consistent theme in the industry, and it appears Georgia companies are not exempt from the struggle. According to the survey, 42 percent of respondents are having a tough time filing both salaried and craft worker positions, 28 percent are having a tough time filing only craft worker positions, 7percent are having a challenging time filing salaried positions and 14 percent are not experiencing any issues with hiring.

• Benefit/Pay Changes: One-way companies are coping with the tightened labor market is by expanding benefits and/or increasing pay to attract and retain labor. According to the survey in 2017, 73 percent of respondents increased base pay, 45 percent provided more incentive pay and bonuses, 25 percent paid more overtime, and 36 percent increased employee contributions and benefits.

• Training Investments: To help ease the hiring demands and issue that are prevalent in the industry, many have implemented new training programs to increase worker knowledge. According to the survey, 68 percent of respondents will increase training investments, 30 percent will maintain current programs and 2 percent will decrease them.
• Future Hiring Market: Given the continued investment in construction it’s difficult to imagine that attracting and hiring skilled labor will become easier. When asked about the future of the labor market participants agreed that it’s likely to stay challenging. According to the survey, 61 percent of respondents expect the hiring process to continue to be hard, 27 percent expect it to get harder and 9 percent were unsure of what would happen.

Contact Us

The good news for most construction companies is they can expect to stay busy with new work opportunities. It’s clear for Georgia companies that the hiring, recruiting and retention challenges will continue in 2018 and likely beyond. If you have questions about the survey or need assistance with a construction audit, tax or accounting issue, please call us at 770-476-1004 or click here to contact us.