The Associated General Contractors of America (AGC) has published their market study detailing the top concerns of general contractors as we begin 2023. The economic uncertainty facing the construction industry in 2023 has deepened the major industry problems plaguing general contractors in the past couple of years. Supply chain issues and material costs overlaid with a real labor shortage for building and non-building construction projects.
Economic recessions, insufficient processes, and continued high costs threaten potential industrial growth. As noted by the responses in the annual AGC market study, general contractors are still concerned about labor shortages, material costs, and now the uncertainty of an economic slowdown or recession in 2023. General contractors must rely on efficient processes to navigate the volatility of schedule delays, subcontractor payments, and rising costs. With the concerns mentioned, efficiency within project management practices becomes even more critical.
Supply Chain and Material Costs
General contractors have mentioned that the majority of projects scheduled to start in 2022 or 2023 have been either postponed or rescheduled. The reason most cited for the postponements and cancellations was “rising costs”, whether it was materials, financing, or insurance-related expenses.
Labor shortage continues to prevent growth and process efficiencies
The second major concern expressed by general contractors looking ahead to 2023 was the continued labor shortage issue plaguing the whole industry. 80% of GCs who participated in the survey mentioned having a hard time filling positions. Indications are that general contractors aren’t optimistic about this becoming easier since 85% reported that hiring will be as hard or harder in 2023.
Some of the tactics being used today to help combat the labor shortage is increasing compensation to attract and retain talent. The majority of GCs who participated in the study reported an increase in base rates, while an additional 33% reported the “introduction or increase” of incentives and bonuses to an employee’s compensation.
How GCPay can Set You Apart From the Competition
Another growing alternative to combat these same industry concerns is increasing productivity and efficiency through technology. Software automation tools can help assist when headcount becomes a challenge, and processes become essential to maintain a strong bottom line. GCPay is a SaaS-based platform designed for general contractors that makes it easy to control what’s required from the subcontractor before they submit the application for payment. Better management around subcontractor contracts, change orders, and compliance documentation results in reduced errors and time savings. All of which can help a general contractor get projects completed faster.
GCPay’s built-in automation lets general contractors customize workflows that make sense for their company. Manage routing of pay app approvals and collection of lien waivers and compliance documents—to get your subcontractor paid faster and on time.
GCPay knows that every general contractor has their own processes and workflows that work for them. GCPay gives them the flexibility to get granular to meet their needs.
- Eliminate subcontractor calculation mistakes by allowing GCPay to catch calculation errors before they ever happen.
- Automate email reminders to your subcontractors.
- Ensure subcontractors submit their payment applications on time.
Save time on data entry with ERP integrations that reduce double data entry, import jobs, and change orders by directly syncing to your ERP. Simply adding an extension to a current ERP is a great way to simplify a GC’s tech stack while expanding its impact on a company’s bottom line.
Simply put, with GCPay, a general contractor can increase the number of jobs they can take on without increasing accounting staff.
Download and view the entire AGC market study here: Construction Data | Associated General Contractors of America (agc.org)
Click below to learn more about GCPay’s benefits or schedule a demo.