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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