Arizona Construction Biz Owners, Here's Your 2016 Forecast

Date: February 02, 2016

Many expect to expand, though finding workers remains a problem.

Arizona Construction Biz Owners, Here’s Your 2016 Forecast

What’s in the forecast for Arizona construction businesses? More highways, hospitals and private office projects, as well as more staff—if companies can find them—according to a new survey.

The Associated General Contractors of America (AGC) surveyed firms in Arizona and across the country to gather predictions for 2016. Among the Arizona businesses surveyed, 75 percent were small businesses with fewer than 50 employees. Most see expansion in their future but admit the terrain will be rocky.

Eighty-three percent of the Arizona firms expect to hire more workers this year, with a quarter adding more than 25 to their headcount. However, almost three-fourths had trouble finding qualified workers last year, and 42 percent think conditions will be even worse in 2016.

“Experienced workers are getting harder and harder to come by with baby boomers retiring,” explained one survey respondent in the national survey results.

This is a major concern for Arizona construction companies. Forty-two percent consider worker shortages among their greatest concerns, beat only by worker quality (58 percent) and tied with both rising direct labor costs and growth in federal regulations. Subcontractor defaults and growth in state and local regulations follow. And for 90 percent of those surveyed, inexperienced labor is a health and safety challenge, so hiring experienced employees is a must.

Speaking of health, Arizona firms see a murky future ahead for insurance this year. Seventy-five percent of businesses surveyed saw the cost of providing health care insurance rise in 2015, and just as many expect those expenses to be even higher in 2016.

The good news is, at least half of Arizona firms expect the available dollar volume of projects they compete for in 2016 to be higher for the following markets:

  • Highway
  • Water/sewer
  • Hospital
  • Private office

Related Content: Small Business News | Arizona | Economy | Labor

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