Construction Demand Outpaces Skilled Labor
The commercial construction continues to improve at a moderate pace, with nonresidential projected to increase by 5% this year, according to a survey of the nation’s leading construction forecasters. A 7.2% increase is expected in nonresidential construction spending for 2014 and the biggest winners are expected to be hotel, retail and office buildings. If office space construction is going to get robust, what factors will drive demand? Stifled construction and increased demand for office space are already fueling the likelihood of new office property development. In particular, an uptrend is approaching for the high-quality urbanized office sector of trophy skyscrapers otherwise known as Class A office space. These Class A properties represent the highest quality buildings in their market. They are generally the most attractive buildings with the best construction, ideal location and high quality infrastructure. As a result of this, they attract the highest quality tenants and also command the highest rents. The demand for the most sought-after Class A office space means new office buildings are likely to be built, but who will build them? Many contractors already feel the strain of construction activity outpacing the supply of labor. It is estimated that nearly 1.5 million workers have left the industry to take other jobs, retire or leave the workforce completely. The construction labor shortage can be blamed for slowing down recovery for some companies as employers are being cautious about adding headcount while others simply can’t find workers.
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