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U.S. contractors report rampant project delays

DCN-JOC News Services
U.S. contractors report rampant project delays

ARLINGTON, VA. – U.S. construction firms are struggling to find enough qualified workers to hire even as they continue to be impacted by pandemic-induced project delays and supply chain disruptions, according to the results of a workforce survey conducted by the Associated General Contractors of America and Autodesk.

The survey, released Sept. 2, found that nearly nine out of 10 firms (88 per cent) are experiencing project delays. Among these firms, 75 per cent cite delays due to longer lead times or shortages of materials, while 57 per cent cite delivery delays. Sixty-one per cent of firms said their projects are being delayed because of workforce shortages. And delays due to the lack of approvals or inspectors, or an owner’s directive to halt or redesign a project, were each cited by 30 per cent of contractors.

An even higher percentage of firms, 93 per cent, report that rising materials costs have affected their projects. The rising costs are undermining firms’ abilities to profit from the work they have, with 37 per cent reporting they have been unsuccessful in passing those added costs onto project owners.

As a result of the supply chain challenges, more than half of firms report having projects cancelled, postponed or scaled back due to increasing costs. Twenty-six per cent of firms report their projects have been delayed or cancelled because of lengthening or uncertain completion times and 22 per cent say changing market conditions have led to project delays or cancellations.

The challenging market conditions are a key reason why 26 per cent of respondents expect it will take more than six months for their firm’s revenue to match or exceed year-earlier levels, said the AGC. And 17 per cent are unsure when to expect a return to previous demand levels.

“Market conditions are nowhere near as robust as they were prior to the onset of the pandemic,” said Ken Simonson, the association’s chief economist, in a statement. “At the same time, the pandemic and political responses to it are limiting the size of the workforce, leading to labour shortages that are as severe as they were in 2019 when demand for construction was more robust.”

 

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