A continuing shortage of building materials and fluctuating costs remain a priority for contractors across the United States, according to the United States Chamber of Commerce’s second-quarter Commercial Construction Index.
According to a chamber survey, 84 percent of contractors face at least one material shortage. Almost half (46%) say declining availability of construction products has been a major concern of late, compared with 33% who said the same in the first quarter.
Most (84%) of contractors report facing at least one material shortage, up from 71% in the first quarter. Some 33 percent experience a timber / lumber shortage and 29 percent a steel shortage. Among contractors facing shortages, 46 percent say they have a big impact on projects, compared to 20 percent who said the same thing in the previous quarter.
In addition, almost all entrepreneurs (94%) say that cost fluctuations have a moderate to high impact on their business, up 12 percentage points from the first quarter and 35 points year-on-year. Wood / lumber and steel are the products of most concern.
Despite the materials challenges, the overall score of the index – a measure of entrepreneurs’ optimism – rose three points to 65, its highest value since a score of 74 in Q1 2020, ahead of the pandemic. Some 89 percent of entrepreneurs report moderate to high confidence in new business opportunities over the next 12 months, up from 86 percent in the first quarter. Those indicating a high level of confidence jumped 10 points to 34% from last quarter.
More than half (52%) of entrepreneurs say they will hire more employees in the next six months, up from 46% in the first quarter.
More entrepreneurs (39%) said they expected their income to increase next year, up from 36% in the first quarter.
In addition, the chamber survey found, for the first time in a year, that the percentage of entrepreneurs planning to spend more on tools and equipment in the next six months (44%) is higher than those who say they will not spend more (42%).
Another nagging concern is the worsening workforce crisis, as the search for skilled labor continues to be a challenge for entrepreneurs. This quarter, 88 percent report moderate to high difficulty finding skilled workers, with almost half (45 percent) reporting high difficulty. Of those who said they had difficulty finding skilled labor, more than a third (35%) turned down work due to shortages of skilled labor.
The chamber also reported that contractors have expressed growing concern about the potential effect of tariffs and trade wars on access to materials over the next three years.
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