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California construction firms expect no layoffs in '14

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Many California construction firms plan to start hiring again, and most contractors predict demand will either grow or remain stable in virtually every market segment in 2014, according to a report released Tuesday by the Associated General Contractors of America.

Contractors surveyed said 25 percent of firms plan to hire this year and 75 percent said they don’t plan to change staffing levels. No one said they would lay off employees this year.

Of those firms that do plan to hire, everyone said it would be more than 25 people.

Contractors commented the most challenging aspect of the current workforce is having a "hard time filling some key professional positions, but no trouble filling craft worker positions," with estimators and project managers being most in demand.

Also, 56 percent of California contractors said it will become harder to find and hire qualified construction professionals over the next 12 months.

Contractors expected the retail, warehouse and lodging sectors to have the largest growth in the number of projects available to bid on in 2014, compared to 2013.

Some 46 percent of contractors expected this sector to expand, 35 percent saw it staying the same and 19 percent saw it declining.

The hospital and higher education markets had the second-highest confidence for growth, with 44 percent of contractors expecting these sectors to expand, 37 percent seeing it stay the same as last year and 19 percent seeing it drop.

Kindergarten through 12th-grade construction projects were scheduled to increase only 18 percent, the contractors said, the lowest of the 11 sectors the employment outlook reported.

Some 27 percent said money allocated for these projects will dip, and 55 percent said it will stay the same as in 2013.

Some 48 percent expected power and energy projects will stay the same; the rest said the projects will drop 10 percent from last year.

Also, 59 percent of contractors said water and sewer projects will stay the same compared to the other 11 sectors.

Contractors expect the other six sectors to be higher by the following: highway, 38 percent; public transportation, 43 percent; manufacturing, 28 percent; public buildings, 36 percent; private office, 31 percent; military construction, 26 percent.

The outlook was based on survey results from over 800 construction firms from every state and Washington, D.C. Each firm’s data is compiled and divided based on its location.

Contractors of every size answered more than 40 questions about their hiring expectations for this year.

Over all around the country, about 41 percent of firms that did not change staff levels last year reported they plan to start expanding payrolls in 2014; only 2 percent plan to start laying off workers.

Net hiring is likely to be relatively modest, with 86 percent of firms reporting they plan to hire 25 or fewer new employees this year.

“Contractors are more optimistic about 2014 than they have been in a long time,” said Stephen Sandherr, CEO of the Associated General Contractors of America. “While the industry has a long way to go before it returns to the employment and activity levels it experienced in the middle of the last decade, conditions are heading in the right direction.”

Contractors across the United States had a relatively positive outlook for virtually all 11 market segments covered in the report, in particular for private-sector segments.

For five of those segments, at least 40 percent of respondents expected the market to expand and fewer than 20 percent expected the market to decline in 2014.

Among public sector segments, contractors were more optimistic about demands for new water and sewer construction.

Contractors are mildly optimistic about the highway construction market.

Sandherr added that contractors’ market expectations are significantly more optimistic than they were at this time last year.

At that time, a majority of contractors expected demand for highway, public transportation, public building, retail, warehouse and lodging, K-12 schools and private officers to shrink.

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