New Year, Same Concerns: Despite Increased Optimism, Skilled Worker Shortage Will Continue to Impact Infrastructure Work in 2022

Rhea-AI Summary

Civil contractors are optimistic about the construction economy in 2022, with 73% confident in finding work. Around 50% expect revenue and profit margins to increase. However, a skilled worker shortage is a significant concern; 72% anticipate difficulties hiring skilled labor, and 89% expect labor costs to rise. 54% report scheduling issues, and 53% struggle with budget constraints due to rising labor costs. The Infrastructure Investment and Jobs Act may exacerbate these challenges.

Positive

• 73% of civil contractors are confident about finding work in 2022.
• 50% expect revenue and profit margin increases.

Negative

• 72% expect difficulties in hiring skilled workers.
• 54% report scheduling issues due to worker shortages.
• 53% face budget constraints from rising labor costs.

Civil contractors are optimistic about 2022; however, over half expect difficulty meeting schedule and budget demands due to skilled worker shortage

HAMILTON, N.J.--(BUSINESS WIRE)-- The latest issue of the Civil Quarterly (TCQ) reveals that civil contractors are more optimistic about the construction economy in their sector in 2022. However, the study also shows that worker shortages will have a major impact on construction and civil contractors going forward.

Effects of Skilled Workers Shortage (Graphic: Business Wire)

The report, produced by Dodge Construction Network in partnership with Infotech, Hexagon, Command Alkon and Digital Construction Works (DCW), is based on a quarterly survey of civil contractors and engineers conducted in November 2021. The findings show that nearly three-quarters (73%) of civil contractors are highly confident about finding work in 2022, and around half expect their businesses to experience revenue and profit margin increases in 2022.

However, the report also reveals an increasing concern about the skilled worker shortage In civil construction. Nearly three-quarters (72%) of contractors expect a high degree of difficulty when finding skilled workers, a dramatic increase over the 58% who reported that concern one year ago. Even more strikingly, 89% believe that the cost of workers will increase in the first half of 2022 — far more than those reporting that one year ago (66%). These labor issues will have major impacts on the sector:

• 54% of civil contractors report that the difficulty in finding workers is impacting their ability to meet project schedule requirements
• 53% report that the increased cost of those workers makes it difficult for them to meet budgets on their projects

As workloads increase in wake of the Infrastructure Investment and Jobs Act, these findings clearly demonstrate that some projects may take longer and be done at a premium price due to the growing concern about worker shortages.

The study also captured contractors' insights into worker recruitment and retention:

• Most contractors believe that good benefits and a reputation for high pay are the best ways to recruit workers, with a greater emphasis on high pay to help recruit workers under 30 years of age.
• Respondents also believe the best way to increase the skilled labor force is to increase enrollment in technical high schools/vocational training.
• The study shows there is no consistent way in which civil contractors recruit workers, but the top three means used are traditional advertisements, working with industry organizations and working with local trade unions. Of these, the most effective is working with local trade unions.

In addition to examining business conditions and worker recruitment, the study also looked at sustainability in this sector. The data shows that green construction is still an emerging practice for civil contractors, with only 25% reporting that they have used a green standard or rating system on their projects in the last five years. The most common green practices employed on civil projects currently include green stormwater and waste management and local material/product procurement, which are each used by more than one third of the contractors.

Currently, the findings suggest that civil engineers are more engaged with sustainability than civil contractors. Nearly one third of civil engineers (31%) have used a green standard or rating system for their projects in the last five years. Over 40% of civil engineers use their top three green practices — green stormwater management, lifecycle cost analysis and creating a construction environmental management plan — and many do so without these practices being mandated by the project owners. In addition, over half (55%) of civil engineers believe that demonstrating that they can build sustainably gives them a competitive advantage, far more than contractors (29%).

The Civil Quarterly provides a quarterly snapshot of the current business health of contractors operating in this dynamic environment and explores trends in the industry: the report is the result of a partnership with Founding partner Infotech^®, Platinum partner Hexagon and Gold partners Command Alkon and Digital Construction Works. It is based on original research collected from civil contractors and engineers and is available for free download to help all those who have a stake in the U.S. civil construction industry. Future editions will continue to address a wide range of related topics providing a comprehensive view of this complex and ever-changing segment of the construction economy. Click here to download a copy: https://www.infotechinc.com/thecivilquarterly/.

About Dodge Construction Network: Dodge Construction Network leverages an unmatched offering of data, analytics, and industry-spanning relationships to generate the most powerful source of information, knowledge, insights, and connections in the commercial construction industry. The company powers four longstanding and trusted industry solutions—Dodge Data & Analytics, The Blue Book Network, Sweets, and IMS—to connect the dots across the entire commercial construction ecosystem. Together, these solutions provide clear and actionable opportunities for both small teams and enterprise firms. Purpose-built to streamline the complicated, Dodge Construction Network ensures that construction professionals have the information they need to build successful businesses and thriving communities. With over a century of industry experience, Dodge Construction Network is the catalyst for modern commercial construction. To learn more, visit construction.com.

About Infotech®: Info Tech, Inc., DBA Infotech (Infotech) is a leading SaaS solutions provider for the infrastructure construction industry. Informed by DOT relationships and decades of experience, Infotech develops software solutions that bridge the gaps between owners, consultants, contractors, and other project stakeholders. Whether it be tools for construction administration and inspection or secure online bidding, all of Infotech’s solutions are built to increase transparency, productivity and the availability of data. Infotech is the developer of Appia^®, Bid Express^®, and Doc Express^®, as well as the official contractor for AASHTOWare Project™. For more information, visit infotechinc.com.

About Hexagon: Hexagon is a global leader in digital reality solutions, combining sensor, software and autonomous technologies. We are putting data to work to boost efficiency, productivity, quality and safety across industrial, manufacturing, infrastructure, public sector, and mobility applications. Our technologies are shaping production and people related ecosystems to become increasingly connected and autonomous - ensuring a scalable, sustainable future.

Hexagon (Nasdaq Stockholm: HEXA B) has approximately 21,000 employees in 50 countries and net sales of approximately 3.8bn EUR. Learn more at hexagon.com and follow us @HexagonAB.

About Command Alkon: As the provider of the leading Supplier Collaboration Platform for Heavy Work, Command Alkon solutions deliver supply chain digital collaboration across the heavy construction community. CONNEX, a technology platform built for the industry, enables business partners to automate and integrate business process, capture real-time visibility into heavy material orders and deliveries, and share knowledge to promote certainty of outcomes. Command Alkon is headquartered in Birmingham, Alabama and has offices in locations around the globe. For more information, visit commandalkon.com.

About Digital Construction Works: Digital Construction Works (DCW) is a leading industry application and technology integration services and solution company. We help owner-operators and constructors accelerate the adoption and use of digital workflows, incorporate digital twins of assets, implement best practices, and, if needed, include the right combination of fit-for-purpose third-party technology to improve construction planning, design-build, operations, and project outcomes. We take current disparate third-party applications and integrate them so they all work together, and they can be managed in a single, secure, integrated platform with project insights. Learn more: www.digitalconstructionworks.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20220120005215/en/

Cailey Henderson

dodge@104west.com

Source: Dodge Construction Network

FAQ

What are the expectations for civil contractors in 2022?

Civil contractors are optimistic, with 73% confident about finding work and half expecting revenue increases.

What challenges are civil contractors facing?

The primary challenges include a skilled worker shortage, with 72% of contractors expecting difficulty hiring.

How will the Infrastructure Investment and Jobs Act affect civil contractors?

It may exacerbate challenges related to worker shortages and could result in longer project timelines and increased costs.

What percentage of contractors expect labor costs to rise?

89% of civil contractors believe labor costs will increase in the first half of 2022.