2023 outlook: Texas construction crews are banking on public funding to get more housing, projects off the ground
AUSTIN (KXAN)-- Construction firms think 2023 will bring more projects like housing and transportation, but they say they need public funding to make sure it happens.
"Contractors have high hopes for public funding in 2023 even as they expect to cope with continued supply chain challenges and workforce shortages," said Stephen Sandherr, chief executive officer of the Associated General Contractors of America.
The Association said many of its survey respondents are hoping to see the impact of new federal moves in infrastructure and construction, including funding from the Bipartisan Infrastructure Law, the CHIPS Act and the Inflation Reduction Act.
"In addition, many state and local governments have boosted their construction budgets as
they have benefitted from a strong economy and a COVID-related influx of federal funds," the outlook report states.
Sandherr also said that higher interest rates affect demand for multifamily residential projects.
AGC's 2023 report states construction firms are less confident about growth than they were a year ago, with the steepest decline of expectations in multifamily and warehouse construction.
Sandherr said supply chain problems have inflated the costs of many construction materials and delayed deliveries.
"Complicating things, these supply chain challenges have been erratic and unpredictable. One week one material is in short supply, while the next week, it is a different product. This makes it hard for contractors to make reliable cost estimates and anticipate production schedules," he said.
Contractors cited those costs and rising costs of financing and insurance for postponed projects in 2022, many of which have not yet been rescheduled.
The Association also pointed out that most contractors expect to find it hard to find workers, even though 79% of respondents in Texas said they've boosted pay.
In Texas, AGC's report indicates that 43% of contractors who responded said they expect it will continue to be hard to hire in 2023. 36% said it would be the same as in 2022, and 10% said it would become even harder in 2023.
What does this all mean for Austin's 2023 outlook? Check back for updates.