As we tie a holiday bow on a great 2017, I cannot help looking forward. And, although no one can tell you with certainty all of the issues that will pop up for the construction industry next year, now is a good time to make some educated guesses based on our experience.
Sure, we may end up being wrong. We will not, however, be surprised.
In 2018, we expect general economic conditions to be stable:
- The unemployment rate will be at/near 4% in the U.S.
- Real GDP will increase in the 2% to 3% range
- Prices will increase at a slightly slower pace than Real GDP growth
For the construction industry in 2018 specifically, we expect the following in 2018:
- Skilled labor will be difficult to find, recruit and hire.
The tightening labor market seems to be the “gift that keeps on giving” year after year. This fact is no surprise to you – or us.
The perpetual shortage of good workers in the right places, ready to jump to new opportunities is real and it is time to put in hiring practices that address this new reality.
In 2018, we’d encourage companies to focus on engaging with candidates by casting a wider net for job postings, being flexible with timelines and taking time to understand how you stand above your peers and competition.
Job seekers will continue to see a plentiful stream of opening postings – making it more important than ever to have clear expectations when entering any job application process.
- Market and Construction Spending Growth – but, in a mixed, dynamic bag.
Yes, the overall construction market will grow in 2018 – the consensus seems to be in the mid to high signal digits for construction starts and spending next year.
The devil, as usual, is in the details with these HUGE metrics.
- Household construction will be up – but at a higher rate for single-family homes relative to multi-family. The housing market data seems to hinge on the buying patterns of millennials.
- Hotel and lodging construction will be down from 2017 while the number of new hotel rooms will increase.
- Public construction is expected to be on the rise in 2018, although the level of governmental spending on highways and interstates is a pending issue with no industry consensus.
- Retail construction, as expected, will continue to decline as internet-based business models continue to steal market share from traditional store-fronts.
Saying that the construction market will grow is a no-brainer. The real power is in understanding where you fit into the mixed bag of data points.
- Commodities and materials prices will grow (again).
A simple internet search for commodities forecasts can tell you a lot about the expected trajectory of energy and raw materials prices in 2018.
For investors, the headlines are glitzy and inviting. One that stuck out to me read “Goldman Sachs: commodities forecasts to deliver bumper returns in 2018.”
For the construction business, though, the above headlines hurt the bottom line unless there is a strategy to pass them along to clients and customers.
Those companies reliant on oil-based products will face increases, analysts agree, in 2018.
Commodity price forecasts are volatile but important in preparations for upcoming contract negotiations with customers in the New Year.
Even though the calendar does not say so, 2018 is here for Goliath – and should be in your view as well.
The construction industry, and those of us who work each day in it, had a great 2017. So, of course, we’ll take some time to celebrate our successes.
But, after this year’s toasts are done and the glow of the holidays dims, 2018 is set to hold opportunities to continue to grow, to expand markets and help enhance our applicants and H.R. partners built their own, unique brand.
At this time next year, I wonder if my predictions will be right. I am hopeful that I am, but cannot be sure today.
I can, though, be prepared for, and focused on, the future.
The Goliath team wishes everything a happy and prosperous holiday season and New Year.