By Caleb Harshberger – Staff Writer, Triangle Business Journal
Feb 9, 2021
North Carolina contractors say they’re bracing for another slow year amid project delays, cancellations and ongoing government cutbacks.
The Associated General Contractors of America 2021 Construction Outlook Survey found contractors surveyed in North Carolina expect the dollar value of projects this year to be flat or worse than 2020 in nearly all sectors of the industry.
The survey found similar sentiments across the country.
“Everybody’s being challenged,” said Dave Simpson, CEO of the Carolinas AGC. “There’s definitely still concern in North Carolina as well as South Carolina in terms of the continuing impact from the Covid pandemic. Some projects are getting delayed and some are getting called off altogether.”
Among the few sectors that North Carolina survey respondents expect to see growth in this year are health care, warehouse and water and sewer projects. Among the sectors they feel the worst about are retail, higher education and lodging.
Infrastructure and transportation spending is also coming in lower than contractors would like after a tumultuous year at the North Carolina Department of Transportation. The department has faced financial challenges in recent years, and revenue shortfalls due to the pandemic have resulted in billions worth of projects being put on hold.
“We’re a little disappointed there could be a whole lot more public work going on,” Simpson said. “We’ve been very concerned about NCDOT … but we think (things) are picking up again.”
Survey respondents also reported running into time delays and project cost increases.
Meanwhile, a recent report by Los Angeles-based Cumming Corporation found that commercial construction in most sectors in the Triangle is expected to dip to 2016 levels this year, though the company said it expects the industry to recover to pre-pandemic levels as soon as 2022 or 2023.
“We’re actually pretty confident about 2021,” said Dan Pomfrett, VP of Forecasting and Analytics at Cumming. “The first part of the year we expect it to continue as 2020. We sort of expect it to move forward at the same pace.”
And even as construction continues its slower pace, companies continue to struggle finding enough skilled labor to fill the roles they still have. Those surveyed told the AGC they’ve been having trouble filling open positions, and many expect that to continue to be the case as the year continues.
Of the top concerns found in the survey, potential labor issues were the top two, followed by rising competition for remaining work and material cost increases.
Despite these concerns, Pomfrett said the Triangle area construction industry is in a better position than many markets to recover from the pandemic.
“As you compare it to the larger markets, the New Yorks, the LAs, those large populace areas have seen a decline and are expecting to see a decline, where locations like Raleigh, Durham and other locations have seen a very steady or even a rise as well,” he said.