2020 Construction Outlook:
CAGC’s perspective
While racking up thousands of miles driving through-
out the Carolinas, it’s amazing how much construction
work is going on these days with building, highway-
heavy and utility work. Construction workers and often
clogged highways are everywhere, from Charleston to
Greenville and Asheville to Wilmington, at a time when
one of our biggest challenges is attracting more people
into our excellent construction industry.

The U.S. economy appears to be slowing. The
naysayers are out there, but output and employment
should continue to grow in 2020. Construction is likely
to remain on an upward path, in North and South Car-
olina as well as nationally.

As Ken Simonson, Chief Economist for AGC of Amer-
ica notes, real GDP—inflation-adjusted gross domestic
product, the broadest measure of economic activity—
slowed in North Carolina from a 3.3% annual growth
rate in the first quarter of 2019 to 1.6% in the second
quarter. Similarly, real GDP growth in South Carolina
slowed from 3.5% to 1.8%. This tracks the slowdown
nationally. Most economists expect U.S. economic
growth to be as slow or slower in 2020.

However, one of the bright spots for the economy is
likely to be housing, now that mortgage interest rates
have dipped to a level that enables many more people
to qualify for a first mortgage, refinance or move to an-
other home without giving up a favorable rate. North
Carolina is well-positioned to benefit from an upturn in
housing. The state’s population has been growing at a
rate of more than 1% a year, while U.S. population
growth has slowed. Land and building costs are both
lower than the national average, making new homes
more affordable in the Carolinas than in other states.

Commercial and industrial construction will also ben-
efit from population and housing growth. In addition,
the state is poised to serve as a hub for transportation
and distribution-related construction. Highway and
other infrastructure construction should also contribute
to the industry’s growth in 2020.

Much appreciation is in order to the N.C. General As-
sembly as lawmakers, before adjourning their long ses-
sion recently, helped pump badly needed funding into
our transportation and highway-heavy construction
needs. South Carolina lawmakers also are to be com-
mended for increasing infrastructure funding.

In the Carolinas, as in much of the U.S., contractors’
top concern is finding enough workers – not work and
© Can Stock Photo / zerbor
By Dave Simpson
President, Carolinas Associated General Contractors (CAGC)
projects to bid on. In an annual survey of construction
firms conducted by AGC of America that was released
on August 27, 91% of the nearly 2,000 respondents said
they expect to hire hourly craft workers in the coming
year, and 70% of the firms plan to hire salaried employ-
ees—mostly for expansion, not merely replacement.

Among the 33 firms that listed North Carolina as their
principal state of operations, even higher shares said
they plan to hire for replacement or expansion—97%
want craft personnel and 77% seek salaried workers.

At the same time, 91% of the North Carolina contrac-
tors said they are having a tough time filling craft posi-
tions and 73% said the same about salaried jobs. That
may explain why construction employment in the state
has slipped a bit in 2019, following eight years of rapid
growth: there just aren’t enough qualified workers to
make up for retirements, let alone expansion.

In short, the outlook for construction in the Carolinas
remains positive but with the ever-present challenge of
finding, training and retaining enough qualified workers.

Please visit our CAGC Build Your Career website to find
how you can help become a BYC ambassador and re-
cruit fine folks for a great industry.

Dave Simpson is president of
the Carolinas Associated General
Contractors (CAGC). This story
was originally published in
the CAGC Newsroom.

The North Carolina Construction News — JAN/FEB 2020 — 3