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Report: 45% of California contractors plan to hire in 2012

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A higher percentage of California construction firms plan to add workers to their payroll, according to an employment forecast released by the Associated General Contractors of America Monday.

Forty-five percent of the 66 California firms surveyed said they would be hiring workers in 2012. Twenty-three percent said they plan to maintain their current number of employees, 21 percent didn’t know if they would add or lay off workers and 11 percent said they would lay off workers.

In comparison, last year 39 percent of those surveyed said they had laid off workers, 26 percent added employees and 35 percent had no change in employment.

The 2012 forecast said 37 percent of firms plan to add five employees or less, 27 percent plan to add six to 15 workers, 16 percent plan to add 16-25 workers and 20 percent plan to add 25 or more employees.

Of those firms planning to lay off workers, 72 percent said five or fewer, 16 percent said six to 15 workers, 3 percent said 16-25 empoyees and 9 percent said more than 25 employees.

Kenneth Simonson, chief economist for Associated General Contractors, said the construction of homes and infrastructure projects are a couple of reasons why contractors feel optimistic about adding workers.

“I think we are getting a definitive upturn in multifamily construction,” said Simonson, adding that housing is picking up in the San Francisco Bay Area and Silicon Valley.

Simonson also said that although the report doesn’t survey contractors who build single or multifamily projects, he did say that contractors surveyed do utility and road work for new housing developments.

“Roads to and from ports, like in Long Beach, to warehouses in the Inland Empire are also being worked on,” Simonson said.

California contractors expect a higher percentage of their bids will be focused on highway construction projects, with those surveyed saying they expect a 36 percent increase in 2012 when compared to 2011.

Contractors also said they expect a higher volume of the projects they bid on in 2012 will come from power (40 percent more than in 2011) and the hospital/higher education sectors (33 percent more than 2011).

Overall in the United States, 32 percent of the approximately 1,300 firms surveyed said they plan to hire workers in 2012, compared to 9 percent that said they anticipate to lay off employees.

Twenty-nine percent of firms around the United States said they don’t plan to make any payroll moves and 30 percent said they didn’t know if they would hire or fire any employees in 2012.

Simonson believes there are some conflicting trends when it comes to contractors’ expectations for construction demand in 2012, which is leading to these employment forecasts.

“On one hand, a majority of firms expect the dollar volume of projects they compete for to either grow or remain stable in every market segment,” Simonson said. “In contrast, contractors working on a number of market segments typically funded by the public sector are less optimistic.

The majority of the approximately 1,300 general contractor and/or specialty subcontracting firms that participated in the survey came from the 20,000 AGC members. The surveys were conducted the final three weeks of 2011.

The AGC could not provide a list of firms surveyed because, according to a spokesperson, AGC did not ask for contact information.

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