Issues related to company and project management-staffing-the biggest business-related issue of construction companies in 2022
Although the construction company reported a 10th consecutive monthly increase in turnover in November, the growth rate has continued to slow down from its peak in the summer. This month's construction expenditure index score of 51.0 still means that most construction companies have seen an increase in their account turnover this month, but the increase is now less than earlier this year. However, the growth rate experienced in this spring and summer is difficult to maintain for a long time, and the strong turnover is now closer to the growth rate of previous recovery periods. In addition, the company continues to report that a large amount of work is in progress, and the value of inquiries and new design contracts is still close to the highest level in history.
However, in November 2021, the business conditions of companies located in the northeastern United States did further decline. This was the third consecutive month of decline. In the past few years, even before the Covid-19 pandemic, conditions in the northeastern United States have been fluctuating, and this trend seems to continue. On the other hand, turnover in other parts of the United States is still quite strong, especially companies located in the Midwest, which have generally had the highest turnover during the recent recovery period. The business conditions of all professional companies also improved in November, but the growth rate has declined. Companies specializing in multi-family housing are still in the strongest business situation, but the market now seems to be slowing down.
Supply chain disruptions and labor shortages continue to bring constraints
The latest Beige Book report released by the Federal Reserve on December 1 indicates that the U.S. economy has grown at a moderate rate during the October-November period. Despite the relatively strong overall economic growth, supply chain disruption and labor shortages continue to be major constraints, and construction activities are one of the industries most affected. Recruitment problems are also common, with companies offering higher salaries and adding other incentives to attract potential employees. During this period, the growth of the manufacturing industry has also been strong, and non-residential real estate activity has also increased, but residential real estate activity has become more complex. For example, sales of single-family homes in the Boston area have been weak, while residential real estate in the Atlanta area has performed strongly, and residential construction in the San Francisco area has continued to grow. According to reports, during this period, commercial real estate in the Atlanta area has also improved.
Non-agricultural employment increased by 210,000 in November, which is much lower than the average monthly increase of 555,000 since this year. The overall employment in the country is still 2.6% lower than the peak before the pandemic. The number of employees in the construction industry continued to rise, with another 31,000 jobs added in November, 10,000 of which came from construction. The construction services industry continued to surpass its pre-pandemic peak, adding 1,600 jobs in October (the latest available data), and the total number of employees in the industry reached 20,900. A total of 17,700 new jobs have been added since the low point during the recession triggered by the new epidemic in July 2020.
Figure 1 The american glass curtain wall building 1
The number one issue in 2022: Improving company profitability
This month, we asked members of the survey team their biggest questions in 2022. As in most years, these concerns revolve around issues related to company and project management and staffing. Many of the top issues that emerged last year related to remote work and the uncertainty caused by the epidemic have fallen from the top ten this year, replaced by concerns about hiring and retaining employees. All in all, the number one problem in 2022 is still the long-term problem of corporate profitability growth, and more than a quarter of the surveyed companies (27%) selected it as one of the three major problems in the coming year. The second highest concern is dealing with fluctuating construction/building material costs and availability. 24% of companies believe this is the most concerning issue, and it has been an issue for most of this year. It now appears that this situation will continue into the New Year.
The main problem in 2022 is staffing in the company. 22% of companies list it as one of the top three problems, as well as filling vacancies more generally (19%), retaining existing employees (16%), and maintaining Competitive salary/handling employee salary expectations (10%). These issues are also related to concerns about the transition of company ownership (21%), and even concerns about negotiating appropriate project costs (14%), because some interviewees indicated that they may need to adjust fees to meet new employees’ concerns. Increased demand for salaries and benefits.
However, overall, most of the companies surveyed (78%) expect 2022 to be a good year for them, and only 11% of companies expect it to be a challenging or disastrous year. Companies located in the northeastern United States are most likely to be more difficult. 20% of companies expect to face challenges, while large companies with annual revenues of more than $5 million are most likely to expect a good year (87%).
Figure 2 The american glass curtain wall building 2
Participants working on the board of directors this month said:
"By 2022, there will be a large backlog, but the number of new staff is limited."-A 185-person residential construction company in the Midwestern United States.
"Things have been very busy. It is difficult to judge how strong the situation will be later next year. Material shortages and costs are also very important."-Glass deep processing commercial/industrial company in the Northeast of the United States.
"In the past 30 days, we have had a large number of RFQs. If we can get one to two years, our year will be very good."-A six-person glass equipment sales commercial company in the western United States.
"2021 is a busy and somewhat surprising year. However, with the uncertainty of rising inflation and the emergence of Omi Keron, 2022 is a mystery, despite the current backlog."-Southern United States A 65-person glass deep-processing manufacturer company.
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