Looking ahead, just 39% of respondent predicted that the situation will worsen, down from nearly half (47%) in Q2. USG says this indicates that although there are shifts in the hiring environment, contractors believe that it's stabilizing. This situation bears monitoring in the coming months as parts of the South begin rebuilding from Harvey and Irma, according to USG.

WASHINGTON, DC—Commercial contractors remain upbeat about the construction outlook over the next 12 months, according to the third-quarter USG Corp. + US Chamber of Commerce Commercial Construction Index, released Monday. However, the picture is clouded by the difficulty contractors face in finding qualified employees.

“This quarter's findings reveal strong optimism about future prospects for the industry, and also highlight a real need to address ongoing concerns about skilled labor shortages and the impact it has on building in the US,” says Jennifer Scanlon, president and CEO of USG. Specifically, 95% of contractors surveyed this summer said they expect revenues to grow or remain stable over the next year compared to the preceding 12 months, nearly the same percentage as in the Q2 2017 survey. And 93% also expect to see profit margins stay the same or increase over the next 12 months.

Conversely, 60% of the contractors surveyed said they're having difficulty finding skilled workers, compared to 61% in Q2. Nearly all contractors, or 91%, expressed at least moderate levels of concern about the skill level of the workforce, with two-thirds of contractors in the South expressing concerns about the availability of skilled labor. The release of the latest Index comes on the heels of the back-to-back Hurricanes Harvey and Irma, which are expected to exacerbate existing concerns about labor shortages in the South.

Fifty-three percent of contractors surveyed in Q3 said they plan to hire new workers, a decrease from 66% in Q2. This is accompanied by a 10% increase over last quarter in the number of contractors that plan to keep the same number of workers, indicating an anticipated shift from hiring staff to maintaining staff levels during the fall and winter months.

Looking ahead, just 39% of respondent predicted that the situation will worsen, down from nearly half (47%) in Q2. USG says this indicates that although there are shifts in the hiring environment, contractors believe that it's stabilizing. This situation bears monitoring in the coming months as parts of the South begin rebuilding from Harvey and Irma, according to USG.