Skilled labor shortage clouds U.S. building industry outlook: survey

Construction towers above the skyline in Miami, Florida, U.S., September 8, 2017. REUTERS/Bryan Woolston

NEW YORK (Reuters) - Contractors for U.S. commercial construction are optimistic about the industry’s health in the next 12 months though finding skilled labor still poses challenges, according to a third-quarter survey released on Monday.

Ninety-five percent of 206 respondents expect revenue to grow or remain stable over the next 12 months, the survey by USG Corp USG.N and the U.S. Chamber of Commerce showed.

Ninety-three percent expect profit margins to stay the same or increase in the next 12 months, a sign of healthy contractor sentiment, the survey conducted July 12-19 showed.

In a potential sign that the U.S. economy may weaken, 53 percent of contractors expect to employ more workers in the next six months, down from 66 percent in the second quarter. This aligns with other studies that show a strong market, but with some tempering of projected growth, the report said.

However, 54 percent of contractors express a high degree of confidence in opportunities for new business over the next 12 months, while 97 percent have at least moderate confidence.

The survey shows strong optimism about the construction industry’s prospects but skilled labor shortages and its impact on the industry need to be addressed, said Jennifer Scanlon, president and chief executive of USG Corp, in a statement.

Results from three gauges of confidence in the commercial construction industry – order backlogs, the pipeline for new business and revenue forecasts - comprise the Commercial Construction Index, which scored 73 in the third quarter, within three points of the two previous surveys.

The survey was started earlier this year to review the financial health and construction outlook for the five traditional commercial property sectors of office, retail, hotel, large apartment and warehousing, as well as other types of buildings, such as government and transportation.

Reporting by Herbert Lash; Editing by Richard Chang