In November of 2023, South Carolina-based Global Location Strategies CEO, Didi Caldwell, told Construction Dive that then-current manufacturing construction was “a once-in-a-lifetime or once-in-a-century-type event that we’re experiencing.” The article went on to list industries that were all racing to feed the appetites of the auto, smartphone, electronics, EVs, and even various military and security applications for technology that had long been imported from other countries.
What is “Onshoring” and How Does it Impact the Construction Industry?
Onshoring refers to operations and work previously outsourced to countries outside the U.S. being brought back to America. The most prevalent example of onshoring in current news comes from the microchip and semiconductor industries, spurred by the Infrastructure Investment and Jobs Act, the CHIPS Act, and the Inflation Reduction Act. All of that industry coming into the United States has to be housed somewhere, which has led to what some have called the biggest boon to U.S. manufacturing construction since 1979.
It’s been nearly six months since publication after publication breathlessly touted the construction boom in their headlines, GPRS included. So, we wanted to check back in to see if general contractors, manufacturers, AEC professionals, and trades were still booming, or eyeing a bust on the horizon.
Where We Were
In February of 2024, the U.S. Census Bureau clocked December 2023 construction spending at a seasonally adjusted 14% increase over December 2022. “The year over year gains [in 2023] were nearly universal across project types,” according to Associated General Contractors of America’s (AGC) Chief Economist, Ken Simonson.
Simonson also touted a “more impressive 20 percent” gain in non-residential construction spending in the same period with every Census Bureau-reported construction spending area experiencing an increase of between 1% and 61%.
That 61% increase in non-residential construction was in manufacturing construction, with $81 billion in gains over 2022. $68 billion of that gain was attributed to “computer/electronic/electrical manufacturing,” which would include onshoring and expansions like recent projects we’ve reported on in Ohio and Kentucky, among others.
The Census Bureau figures bear out continued new investment and construction across various manufacturing sectors in 2023 which are ongoing into 2024, including a big bump in the power construction sector, which includes renewables, of some 24%.
The investment in power of all types is important, as data center construction was booming as we entered 2024, causing traditional data corridors in places like Virginia to look to innovate as their energy needs soar.
Where We Are
Even with lending rates still surpassing 10% or more for non-residential construction, the construction industry is still racing to fill unclaimed jobs across the board. The most recent Labor Department figures reported on April 5, 2024 showed that 39,000 new construction industry jobs added to the surprisingly strong jobs report.
As reported by NPR’s Scott Horsley, Associated Builders and Contractors’ (ABC) chief economist Anirban Basu called it “a blockbuster jobs report,” and noted that the new report highlighted the fact that construction doubled its hiring gains average over the last 12 months, adding, “recession is not arriving anytime soon.”
Perrysburg, Ohio’s Kwest Group was also tapped by NPR, and their CEO, Ryan Odendahl, said they are looking to hire more people right now and that, “Young people are starting to see the opportunity, both from an earnings potential and a growth potential that the construction industry offers.”
In fact, ABC’s Construction Confidence Index reports that 48% of builders anticipate additional new hires over the next six months – traditionally construction’s “busy season” across the U.S. – with only 11% expecting to shrink their workforce over the same period.
Those figures are in line with the construction unemployment rate, which still sits higher than the 3.4% national average, at 5.4%. However, that number is down from 5.6% in 2023.
It is important to note that a wide swath of the northern U.S. enjoyed far warmer than normal temperatures for most of the early months of 2024, which means more projects could proceed without stopping for harsh outdoor conditions, as well.
The weather, along with onshoring and the unprecedented federal manufacturing spending boost have led many companies to step up their recruitment and hiring efforts. Some 501,000 new construction sector jobs, over and above the pace of “normal” hiring, will need to be filled to complete most 2024 projects, according to ABC.
Further, according to Builder Online, AGC’s 2024 outlook reporting shows that, “[M]ore than two-thirds of respondents [to their annual survey] expect to add to their headcount in 2024… “Additionally, nearly one-quarter of respondents anticipate headcount for their firm increasing by more than 10% in 2024.”
More than 75% of those same respondents also said they’re struggling to fill open positions, and expect it to become more difficult to find salaried or skilled tradespeople throughout 2024.
This is leading firms to look at increasing base pay, add to their portion of paid benefits, and provide additional incentives and bonuses to secure the workforce they need. Nearly every area of construction is impacted: heavy equipment operators, masons, carpenters, plumbers, and electricians are all in demand.
Where We’re Headed: Embrace the Boom, but Tread Carefully
If construction workers can command top dollar, and relatively high interest rates are not slowing manufacturing construction in the near-term, that means something has got to give.
Many industry watchers are predicting a slowdown in project completion caused by workforce issues. And, while some industry economists are looking at a mixed overall bag for growth in 2024, there is no denying that non-residential construction is moving full speed ahead as we get into Q2.
Specific to large design-build projects, developers, and general contractors, one of the cement industry’s top economists, Ed Sullivan, said the PCA’s (Portland Cement Association) forecast expects the market to “weaken” over the first half of 2024 and recover as the construction season moves ahead. And Electrical Contractor calls the marketplace “Strong but challenged,” but also admits that this economy is unprecedented, exemplifying many industry-watchers desire to embrace the boom, but tread carefully.
GPRS helps customers Intelligently Visualize The Built World® and provides existing conditions documentation, damage prevention, and site and facility data management solutions to the construction and related industries.
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Frequently Asked Questions
How does GPRS help general contractors and construction supervisors increase productivity?
GPRS provides accurate as-built documentation – above and below-ground – for the construction and related industries nationwide. We can capture existing conditions with 2-4mm accuracy for aboveground features and provide 99.8%+ accurate utility mapping. All of our data capture, maps, and models are delivered to customers via SiteMap®, our damage prevention and facility management application that allows you to securely share information with your team, on site or off, 24/7. Every GPRS customer receives a complimentary SiteMap® subscription – learn more here.
What specific visualization services does GPRS provide?
GPRS provides 99.8% accurate utility locating and concrete scanning and imaging services, 3D laser scanning with 2-4mm accuracy, NASSCO-certified video pipe (CCTV sewer scope) inspections, leak detection, and can build customized 2D and 3D drawings, maps, models, and reports to meet your specific project needs. We are the only company in the U.S. with the ability to provide full site visualization on a national scale, with 500 elite Project Managers stationed throughout the country, so there’s always a professional utility locator, concrete scanner, laser scanner, leak detector, and sewer inspection company near you.
How do I get a job with GPRS?
At GPRS, we don’t want to give you a job, we want to provide you with a career. That’s why our Project Managers undergo extensive training in Subsurface Investigation Methodology; so that they can arrive on any jobsite anywhere in the country (and sometimes outside it) and provide professional visualization and damage prevention services to keep construction jobs on time, on budget, and safe. Learn more about a career with GPRS, here.