SLAM Labor & Material Analysis of 4th Quarter 2014

Since the start of 2014 the market has been steady but fragile. Material costs and labor hourly rates increased by 2 percent in 2014, and as of now are predicted to continue to grow at that rate per year. Contractor's overhead and profit margins remained competitive, but are showing signs that they will increase in 2015. Operating costs, market conditions, escalation and labor shortages will have an effect on their overhead and profit, providing challenges as to how to remain competitive in 2015.  

The drop in fuel pricing gave a boost to year-end reports for 2014. Confidence continues to grow, but at a flat rate. Despite the fuel anomaly, the industry has remained a sellers" market. Buying power continues to decrease — purchasing less to higher values.

Most construction forecast reports are showing construction growth for 2015 and 2016, with everything looking rosy, but firms are concerned about getting overextended as the market expands. Construction cash-flow (invoicing and collections) remains a major concern, especially for trade contractors and vendors.

Construction continues to remain competitive, but many anticipate that growth will not be realized until the middle of 2015.

Companies plan to add staff in 2015, but remain concerned about worker shortages (skilled trades, supervisors, estimators, and engineers). Finding experienced workers will be difficult, indicating that training and managing new employees will affect the bottom line in the short term. Firms are no longer looking at short-term fixes but are establishing goals for long-term benefit.

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