Commercial Construction Index reports slow recovery

92% of contractors report some level of difficulty finding skilled workers, but this quarter, 55% indicate high levels of difficulty—a jump of 10% from Q2. The lack of skilled workers has caused 42% of those contractors reporting difficulty finding workers to turn down work, up from 35% in Q2. Also, this quarter, 73% of those contractors who report difficulty finding skilled labor say it’s a challenge to meet project deadline requirements (up from 56% in Q2), and 59% are putting in higher bids for projects (up from 50%).

Contractors are also struggling to find materials to complete their projects. A record 93% of contractors report they are facing at least one material shortage. Also, an all-time high of 98% of contractors say building product cost fluctuations are having an impact on their business, up 35 points year-over-year.

Reversing a year-long trend, the product which most contractors are experiencing a shortage in this quarter is steel (34%), followed closely by lumber at 31%. Since Q3, lumber had been the most often reported shortage. Last quarter, 33% of contractors reported a lumber shortage, 29% reported a steel shortage.

Other key findings of the CCI include declines in equipment spending – 40% of contractors say they will increase spending on tools and equipment over the next six months (down from 44% from Q2)—and diminishing confidence in revenue expectations. According to the CCI, the percentage of contractors who expect their revenue to increase (37%) is down two points from last quarter, while more contractors (10%) expect their revenue to decrease, up from 6% in Q2.