2024 Construction Industry Outlook – Shortage of Skilled Labor Identified as a Major Concern

Marcum LLP, a prominent national accounting and advisory firm, has unveiled its 2024 Marcum National Construction Survey. This in-depth report sheds light on the current state of the construction industry and provides a forecast for its future based on feedback from industry leaders across the country.

The survey reveals that while there is a sense of optimism among construction executives, it is tempered by concerns over economic and political uncertainties, particularly given the impact of an election year. The report highlights that significant federal funding from the Infrastructure Investment and Jobs Act (IIJA), CHIPS Act, and Inflation Reduction Act is anticipated to drive growth in the sector, especially in infrastructure, semiconductor manufacturing, and clean energy projects.

However, the persistent shortage of skilled labor continues to be a major concern, with nearly 29% of respondents identifying it as the most significant threat to their business. Additionally, the survey notes a decline in office construction due to lasting changes in the white-collar workspace, contrasted with strong demand in healthcare, education, and renewable energy sectors.

Despite challenges such as inflation and rising costs of living, the construction industry has shown remarkable resilience. The sector benefits from healthy project backlogs and reduced competition, as indicated by fewer bidders per job. This situation reflects a sustained demand for construction services.

Another emerging concern is cybersecurity, with industry leaders recognizing the growing sophistication of cyber threats. As a result, there is an increasing need for companies to bolster their cybersecurity measures to safeguard against potential attacks.

The survey also highlights financial challenges within the industry, particularly due to higher interest rates and stricter credit conditions. These factors have led to delays and cancellations of projects, with 38% of respondents reporting difficulties in securing financing. Moreover, the report reveals that many construction firms are not fully utilizing available tax incentives, with 37% of participants failing to take advantage of any of the eight tax incentives highlighted in the survey.

Succession planning is also a priority for nearly half of the respondents, emphasizing the importance of preparing for leadership transitions. The competitive landscape is evolving as well, with 65% of respondents reporting just 1-4 bidders per project, marking a notable decrease in competition.

Joseph Natarelli, Marcum’s National Construction Industry Leader, commented on the findings, stating that despite the challenges, the overall outlook for the industry remains positive. He expressed surprise at how many firms are not leveraging valuable tax incentives and urged leaders to explore these opportunities, along with new technological advancements, to strengthen their businesses and prepare for future uncertainties.

The 2024 Marcum National Construction Survey offers a comprehensive view of the challenges and opportunities within the construction industry, providing stakeholders with valuable insights to navigate the changing landscape effectively.

Marcum Partner Roger Gingerich, leader of the firm’s Midwest construction practice, emphasized the importance of the survey’s findings, noting that it offers practical insights that can significantly impact businesses over the coming year. He highlighted the survey’s role in helping firms of all sizes strategize for the future, encouraging the adoption of more efficient financial practices and the utilization of overlooked incentives to improve their competitive standing in a rapidly evolving market.

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