Economic confidence among CEOs from small and mid-sized businesses has fallen to the lowest level in three years, according to Vistage’s Q2 CEO Confidence Index survey. However, construction CEOs are more optimistic than the national average due to increased business demand, which is causing the need to expand their workforce.

Vistage’s recent survey captured responses from 1,463 CEOs of small and mid-sized businesses in a variety of industries across the United States. Included in this national data is 224 responses from CEOs in the construction industry, a reliable base for comparing the sentiment of CEOs in construction to the national base.

Each quarter, the survey captures:

• CEO sentiment on the current and future state of the national economy;
• Expectations for revenue and profitability; and
• Expansion plans, specifically hiring and investments.

CONSTRUCTION CEOS ARE OPTIMISTIC ABOUT THE FUTURE

When asked about revenue expectations, 65% of CEOs in construction reported projections for increased revenues in the coming year, which is on par with the national results. Additionally, 61% expect their profitability to improve over the next 12 months, notably higher than the national figure of 54%.

The reason for these optimistic expectations is demand. The labor shortage and increased demand in the industry results in construction CEOs projecting workforce expansion at a greater rate than the national average. According to Vistage, 66% of construction CEOs are planning to increase the size of their workforce in the next 12 months compared to 56% nationally. While there is a labor shortage today, fortunately, there’s a shift of mindset that is unique to the construction industry that will help them find qualified talent.

Changing the mindset about qualifications

A challenge that skilled labor industries continually face is the belief that their employees must have a four-year degree to be successful. Many construction and other business owners are working to change that mentality—and they are starting to see a shift.

According to the U.S. Department of Education, there were roughly 9.66 million students enrolled in trade schools in 1999 and an estimated 16 million students enrolled in 2014. The increase in enrollment shows a positive shift in how students are viewing trade schools compared to four-year universities.

This change in perception about trade schools could be a factor in why more CEOs in construction industries are planning increased hiring in the next year than the national average.

With more students now enrolled in trade schools and participating in apprenticeships programs, construction CEOs may anticipate a bigger talent pool of skilled workers entering the workforce to support those expansion plans.

Optimism ahead

Strong expectations for revenue and profits, along with the increasing pool qualified talent coming from trade schools, is allowing construction CEOs to feel confident about their business in the year ahead and the ability to capitalize on demand.

See the Q2 2019 Vistage CEO Confidence Index report and infographic to learn more, including:

• Sentiments about the performance of the U.S. economy;
• Revenue and profitability expectations;
• Expansion plans for hiring and investments;
• Talent management challenges; and
• Impact of employee retention.