We have just past the halfway point of 2019, and so far, this year has remained a strong one for the United States’ economy and its workforce, with the unemployment rate sitting at 3.6 percent as of May. This sense of positivity has spilled over into many industries, including the commercial construction sector.
The Q2 U.S. Chamber of Commerce Commercial Construction Index shows a mostly optimistic outlook from construction workers in the commercial division. Furthermore, data from this study highlights major trends that can be expected from the industry as we move forward into the second half of the year.
Read on for the three commercial construction industry trends you should be paying attention to during the final six months of 2019.
Increased Confidence for Business and Revenue
As mentioned above, members of the commercial construction sector are exhibiting a substantial amount of optimism regarding their industry. In particular, this positivity is in regard to new business and revenue.
According to this quarter’s index, 52 percent of contractors are very confident about receiving new business opportunities over the next 12-month period. This figure is 11 percent higher than what it was after Q1.
Additionally, 60 percent of contractors believe that revenue in the commercial sector will continue to be steady and remain unchanged.
These numbers indicate that performance from workers in the commercial division of construction will remain high and, given the eagerness for new business opportunities, that the rate and speed at which projects are completed may even increase.
Concern Over Labor Shortages
One of the primary focuses for most construction firms at the start of 2019 was how they were going to deal with labor shortages. However, the amount of laborers appears to be less of a concern for the majority of commercial construction contractors as we head into the second half of the year.
According to the Q2 index, “high concern” over the number of skilled workers available decreased from the first quarter by 9 percent, shrinking from 54 percent to 49 percent.
However, concern for the cost of skilled labor still remains high. 85 percent of contractors are still worried about the price they’ll be paying for these workers.
Disparity Between Green Standards and Practices in Commercial Construction
Lastly, the index shows an apparent disparity between green standards and practices in commercial construction. While 84 percent of contractors stated that they must fit green standards on at least one or more of their projects, only 47 percent of these contractors make use of the green incentives provided to them.
The overwhelming reason why contractors choose not to use green products is cost. 66% of contractors from the commercial sector stating that as their reason for avoiding them. In order for green construction practices to become more of the norm, members of the construction industry either need more funds, or the building products industry must find a way to make their products more affordable.
When it comes to building materials, contractors primarily seek out products that are energy and water efficient and do not possess harmful chemicals. Also, they mostly use these green materials for projects in order to better control erosion and sedimentation and to recycle waste streams.
The current state of commercial construction appears to be mostly positive, as contractors remain optimistic about future projects and steady revenue. However it is still important to be aware of concerns within the industry, such as the cost of skilled labor and green materials.
Be sure to these trends in mind throughout the remainder of the year and continue to pay attention to them as they evolve over the next six months and into 2020.