It was a full house at the 45th Annual State Construction Conference Thursday at NC State's McKimmon Center in Raleigh! More than 1,000 engineers, architects, designers, builders, and contractors convened to discuss construction standards, updates and industry changes. This conference is considered the preeminent education and networking event for construction professionals to discuss the state’s capital improvement program and mutual concerns about the costly and complex process of constructing public projects.
One of the highlights of the conference each year is the “Economic Forecast” presentation by Ken Simonson, Chief Economist for AGC of America. While Simonson’s 18th consecutive presentation may not have been as optimistic as prior years mostly due to tariffs and labor shortages one piece of good news is that the economic outlook in the Carolinas is more positive than in most of the rest of the country. NC and SC are faring better than most other states due to continued population growth with higher rates of construction job growth than the national average.
“Insufficient supply of workers and subcontractors, higher labor costs, and worker quality continue to be the top concerns for contractors in both NC and SC.” said Ken Simonson, Chief Economist for AGC of America. “Fear of an economic slowdown and increased competition for projects were also listed as major concerns.”
Some highlights of Simonson’s presentation included:
- Economic Growth is slow:
- Tariffs are increasing the cost of construction materials, inviting retaliation and disrupting supply
- Harsh immigration/deportation actions are worsening the construction labor shortage
- Expectation of larger deficits may push interest rates higher
- Private construction is declining; public construction is positive but weak
- However, lessened federal regulations may help projects start sooner and move quicker
- Single Family: gradual pickup if mortgage rates don’t spike; multifamily close to bottoming out
- Warehouse, office – declines likely through 2026 given high costs and weak demand
- Data center, power, infrastructure, specialty health care are best bets for growth
- Manufacturing construction – canceled and deferred projects likely to outweigh new starts but in NC, pharmaceutical facilities could be a positive
- Materials costs: up 2-4% but could rise even more if tariffs last
- Labor costs: up 4-5%. ICE actions make availability a challenge. Both NC and SC are heavily dependent on foreign born workers.
Other highlights of the conference included the special guest speaker Lt. Governor Rachel Hunt who recognized Women in Construction week and highlighted the need to invest more in our construction trade programs in high schools and community colleges.
The HUB award winners included CAGC member Stephane Joyner with Diverse City Services who was recognized with the HUB Business Advocate of the Year award. Diverse City Services works as the Program Administrator for CAGC’s very successful Construction Business Academies.
Download and view Ken Simonson’s complete presentation.