January 29, 2024

What's in store for Washington's construction industry in 2024

Sandherr

AGC of America and Sage conduct an annual nationwide survey of construction firms to get a better sense of the industry's expectations for the coming year. Early in January, we released our latest construction hiring and business outlook, titled “A Construction Market in Transition.” On balance, contractors in Washington and across the country remain upbeat about the available dollar value of projects to bid on in 2024.

Among contractors in Washington state, the net reading — the percentage of respondents who expect the available dollar value of projects to expand compared to the percentage who expect it to shrink — is positive for 14 of the 17 categories of construction included in the survey.

Washington contractors are most optimistic about infrastructure and federal construction projects. Specifically, the highest net positive reading in the 2024 survey — 55% — was for transportation construction. This was followed in Washington by a 45% net reading for bridge and highway construction projects and a 37% net reading for federal projects.

Most firms in Washington anticipate adding workers in 2024 to accommodate the higher demand for projects. More than two-thirds (68%) of the respondents expect to add to their headcount, compared to only 13% who expect a decrease. However, 69% of Washington contractors report they are having a hard time filling some or all salaried or hourly craft positions.

As a result of these labor challenges, most firms in Washington took steps in 2023 to attract and retain workers. Fifty-eight percent increased base pay rates more than in 2022. Additionally, 39% of firms provided incentives or bonuses and 19% of the firms increased their portion of benefit contributions and/or improved employee benefits.

Meanwhile, almost equal percentages of firms in Washington report projects were postponed or canceled in 2023 and not rescheduled (44% of respondents) as report projects were postponed but rescheduled (40%). Ominously, 13% have already experienced postponement or cancellation of a project that had been scheduled for the first half of 2024.

These challenges are prompting many firms to invest in technology that will make them more efficient. Thirty-six percent of respondents from Washington state expect their firms to initiate or increase investments in drones, while 26% will invest in artificial intelligence — many for the first time — and 23% will invest in offsite production.

Here at the Associated General Contractors of America, we are working to make sure the outlook for 2024 remains positive. We are pushing for new funding for construction education and training programs as part of both the Workforce and Innovation Opportunity Act and the Pell Grant reauthorization legislation that are expected this year in Congress.

We will continue to urge the Biden administration to implement mandated reforms to the federal review and permitting process and otherwise ensure that the federal government no longer serves as the biggest obstacle to its own construction investments. And we will continue to push for improvements to the new Buy America rules, so vital infrastructure projects aren't stymied because a single washer on a single fixture includes some materials that were mined abroad.

The bottom line is we are committed to working with policymakers and our members to make sure the conditions are right for firms to be successful in their efforts to improve the nation's infrastructure, modernize manufacturing and build an even stronger economy.

Stephen E. Sandherr is the chief executive officer of the Associated General Contractors of America.

Other Stories:

• Wallace lines up 4 priorities for 2024
  
• Association honors Dully, Pizzey and Hill
  
• 2024 AGC officers, board members