Contractors Continue to Carry Labor Shortage Worries into 2019
The labor shortage continues to be a major concern for contractors, who believe it’s impacted their business and driven technological adoption, according to “The 2019 Construction Hiring and Business Outlook” survey from the Associated General Contractors (AGC) of America and Sage Construction and Real Estate.
For 2019, 79 percent of the 1,300 contractors surveyed said they expect to increase headcount. That’s up from 75 percent in 2018.
Several changes can be made to attract new workers, including increasing pay or benefits for salaried or hourly craft personnel. Of the contractors surveyed, 59 percent reported that they did increase pay in 2018 because of difficulty filling positions, while more than a quarter said they provided incentives or bonuses in 2018 and 21 percent said they increased a portion of their benefits.
Contractors said staffing challenges have impacted their projects in many different ways, including costs being higher than anticipated, projects taking longer than anticipated, having to put higher prices into bids or contracts and no longer putting completion times into bids or contracts.
While contractors are most worried about the worker shortage, other concerns firms are facing in 2019 include increased competition for projects, safety, growth in federal regulations, worker quality, rising direct labor and lack of infrastructure investments. As companies continue to adjust to the labor shortage, many are adopting methods to replace workers or skills on the jobsite, including:
– Methods to reduce onsite worktime such as lean construction, building information modeling (BIM) or off-site fabrication (32 percent);
– Using labor-saving equipment such as drones, robots, 3-D printers or laser- or GPS-guided equipment (28 percent); and
– Adding specialists such as BIM or lean construction personnel, drone or other equipment operators, data or IT personnel (18 percent).
However, half of contractors reported making no changes to replace workers or skills. Despite not adopting any of those methods, 63 percent of contractors reported plans to increase their investment in training and development in 2019 compared to 2018.
Lixil Terminates Permasteelisa Sale After Block by U.S.
Lixil Group Corp. is terminating its agreement to sell Permasteelisa, Lthe Italian building envelope company, to Grandland Holdings Group following the U.S.’s blockage of the sale in October. Lixil, a Japanese company, originally agreed to sell Permasteelisa to Grandland, a Chinese architectural design and construction company, in August 2017.
The Committee on Foreign Investment in the United States (CFIUS) blocked the sale on October 22, 2018. Lixii chiefflnancial officer Sachio Matsumoto told Nikkei Asian Review that “the trade war probably had an effect” on the decision.
Lixil announced in a release that it will now focus on creating a strategy to support Permasteelisa’s long-term growth as a part of Lixil.
“The situation with CFIUS provided us with an opportunity to review the Permasteelisa business. We are committed to working through all options to ensure that a robust plan is put in place that will not only strengthen Permasteelisa but also the broader Lixli Group,” said Lixil Group chairman and CEO Yoichiro Ushioda.
Lixil purchased Permasteelisa for approximately $812.6 million* (EUR 573 million) in August 2011. North America is one of its largest markets, with an operating revenue of $473.5 million (EUR 418.6 million) in the fiscal year ending on March 31, 2018.
Permasteelisa released a statement welcoming the termination of the sale.
*Editor’s note: The USD amount was calculated using the exchange rate at the time of the sale, which was 1 EUR = 1.4182 USD.
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