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Nearly three-quarters of Michigan construction firms say they plan to hire workers in 2019, according to a new survey.

The Associated General Contractors of America released its 2019 construction outlook survey on Wednesday, which illustrated the greatest challenge for contractors is finding qualified workers as low unemployment pushes employers to fork over higher wages and better benefits.

"Contractors are still optimistic for nearly all types of projects," said Ken Simonson, chief economist for the organization, "but they face significant challenges in finding and training the workers they'll need to perform those projects."

Although 79 percent of firms in the United States said they plan to hire, 78 percent reported they are having a hard time filling salaried and hourly positions.

That is no different in Michigan, where, according to 42 respondents, 79 percent of firms are having a hard time filling some or all positions. Few expect any relief in 2019.

Michigan businesses were slightly more pessimistic about the year's prospects. Expectations of available dollar-volume for projects increased in 11 of 14 segments, compared to 13 nationally.

Simonson said news that General Motors Co. is planning to idle five plants this year will likely decrease demand from suppliers and other manufacturers for construction projects.

For 45 percent of Michigan firms, the worker shortage is their biggest concern, leading to challenges with inexperienced staff and safety concerns. Staffing challenges, they said, also have increased costs and bids and lengthened project timelines.

As a result, 62 percent of firms said they increased base pay rates, 45 percent said they provided bonuses and 14 percent said they improved benefit contributions in 2018. In 2019, 65 percent of firms said they would invest more in training and worker development and 33 percent said they would increase their investment in human resources software.

"We expect they will invest more in training and tech," Simonson said, "but there will be challenges in integrating that technology

Increased spending will come from hospitals, according to 42 percent of firms, as local health systems including Beaumont and Henry Ford plan new locations and expansions.

Power-related projects are expected to grow for 32 percent of firms, as utility companies look to reduce their reliance on coal. Water and sewer construction demands are expected to increase for 30 percent of firms since the Flint Water Crisis drew attention to issues with old pipes, Simonson said.

For federal construction projects, 10 percent of firms predicted more opportunities will be available, while 87 percent expect them to stay the same. The survey, however, was collected prior to the U.S. government shutdown that began on Dec. 22.

"So far, we think the shutdown has had a very minimal effect because it occurred during the week that so many businesses were closed and many federal offices were very light anyway," Simonson said.

A prolonged shutdown, however, could hurt contractors who rely on federal construction, which represents a small portion of the market, and delay permitting processes from federal agencies.

bnoble@detroitnews.com

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