South Carolina’s construction industry was one of the few sectors of the economy to create jobs in 2020, and new research shows that some companies in the state expect this trend to continue, even if many construction projects are canceled or delayed.
Associated General Contractors of America, a national trade organization representing construction companies, released its annual forecast for 2021 on Thursday, and group leaders have warned that nationally, most construction companies expect to suffer a year of low.
Stephen Sandherr, the CEO of Associated General Contractors, said that its members are reporting that many projects that were scheduled to start in early 2021 have been delayed or canceled as a result of the coronavirus pandemic and the dramatic changes in the public health crisis it has created in the economy from the USA.
This loss of revenue, he said, should prevent many construction companies in the United States from adding new jobs this year.
“This is clearly going to be a difficult year for the construction industry,” said Sandherr. “It seems that demand is likely to continue to decline, projects are being delayed or canceled, productivity is declining and few companies plan to expand their staff.”
Nationally, only 35% of the 1,300 companies surveyed expected to increase their staffing levels by 2021.
In South Carolina, 40% of respondents said they expected to hire more employees. This more positive outlook is common in southern states, according to the group’s report.
In December, South Carolina’s construction industry employed approximately 113,000 people. This includes general contractors, subcontractors and other companies serving the sector.
Last year presented many problems for the construction industry in the state, even as it continued to take advantage of a wave of business that was under way long before the pandemic set in.
Approximately 56% of companies surveyed in South Carolina said that the projects are taking longer than expected, and 48% said that the costs of construction projects were higher than anticipated.
Companies in the state of Palmetto may have withstood these problems in 2020, but they also expect construction demand to decline in some segments in the coming months.
Construction companies do not expect to see many projects for new retail stores, hotels, colleges and offices materializing in the coming year. And they are planning that revenue from these types of projects will decline dramatically.
At the same time, companies are more confident in projects involving hospitals, warehouses and the federal government.
To try to boost the construction industry, Sandherr said his group will lobby Congress and President-elect Joe Biden to increase federal government investment in infrastructure projects. He also said the group would pressure the federal government to send money to state and local governments to help pay for similar public works projects.
Sandherr considered this the “ideal time” to improve highways, water infrastructure and other public construction projects.
“The prospects for the sector can improve, however, if federal authorities are able to increase investments in infrastructure, replenish state and local construction budgets and avoid the temptation to impose new costly regulatory barriers,” he said.
The next six months will be difficult for some construction companies, said Sandherr, but the goal is to ensure that they end 2021 in a better position than the beginning.
Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.