CHARLOTTE, N.C., Feb. 3, 2025 -- Nationally, construction contractors are expressing optimism about certain private-sector segments and have high hopes for most types of public-sector work. However, according to survey results released by the Associated General Contractors of America (AGC) and Sage, there are ongoing concerns regarding labor shortages and the rising costs of materials, which contractors worry may be exacerbated by the potential for new tariffs. These insights are part of A Year in the Balance: The 2025 Construction Hiring and Business Outlook, which explores contractors' expectations and challenges for the upcoming year.
Carolinas AGC President & CEO Dave Simpson is among the optimists. "While we have concerns about the workforce shortage and attracting talented individuals to pursue careers in construction, we are anticipating positive growth for the commercial construction industry in the Carolinas in the coming years," Simpson shared. He emphasized that Carolinas AGC (CAGC) is proactively addressing workforce challenges through programs like the Construction Bootcamps and the Construction Business Academies. These initiatives aim to attract new workers and address member concerns about workforce gaps in the region.
For more details on North and South Carolina’s business outlook, CAGC members can access specific survey results for both states.
National Concerns
The survey also reveals that, across the nation, contractors’ top three concerns are workforce-related. Notably:
- 62% of contractors view rising direct labor costs as one of their major concerns.
- 59% are troubled by the insufficient supply of workers or subcontractors available for projects.
- 56% are concerned about worker quality.
While workforce issues dominate national concerns, materials costs emerge as another significant issue, cited by 54% of survey respondents. This concern is directly tied to supply chain fluctuations and the possibility of new tariffs under the Trump administration. Given improvements in supply chains, the concern appears to be influenced by President Trump's recent threats to impose new tariffs on construction-related materials.
Call for Legislative Action
In response to the workforce and materials challenges, AGC officials are urging the new administration to take immediate action to address the labor shortage in the construction industry. They are calling on President Trump and Congress to work together to establish new temporary work visa programs specifically dedicated to the construction sector. Additionally, AGC is advocating for the Stronger Workforce for America Act, which proposes increased funding for post-secondary construction training programs and high-school construction education programs to help build a pipeline of skilled workers for the future.In addition to workforce challenges, contractors are concerned that material costs may continue to rise, particularly due to the threat of new tariffs that could further strain the already fragile supply chains.
Looking Ahead
Despite these challenges, there is a general sense of optimism within the industry. "We are focused on finding solutions to these problems and are confident that the commercial construction industry in the Carolinas and nationwide can overcome these hurdles," said Simpson. The collective efforts of organizations like Carolinas AGC and other industry leaders are working to build a more resilient workforce, reduce material costs, and improve the overall business environment for contractors in the coming year.
About Carolinas AGC (CAGC)
Carolinas AGC (CAGC) is a trade association representing a wide range of contractors and construction-related firms across North and South Carolina. The organization includes both small and large commercial contractors who perform work in building, utility, and highway sectors. As a chapter of the AGC of America and ARTBA, CAGC serves as a valuable resource for its members, offering programs, training, and advocacy. To learn more, visit www.cagc.org, or connect with them on Facebook, YouTube, X, and LinkedIn.
For more on CAGC membership, click here.This report highlights the balancing act that contractors are navigating—maintaining optimism for future growth while facing real concerns about workforce shortages and rising material costs. As the industry continues to evolve, the collaborative efforts of contractors, associations, and legislators will be essential to ensuring a thriving construction ecosystem in the year ahead.