AGC of California's 2025 Industry Outlook survey reveals contractor optimism with expectations of business growth, increased hiring and profit gains. Challenges include demand for skilled labor and regulatory compliance. Strategic initiatives aim to support industry growth. For details, visit www.agc-ca.org.
The Associated General Contractors of California (AGC of California) released findings from a recent membership survey, highlighting optimism among contractors about the future of the construction industry.
Respondents anticipate strong financial performance, growth opportunities and robust recruitment efforts in 2025, underscoring an encouraging outlook for the sector.
"Listening to our members through this survey is vital. It gives us a deeper understanding of their challenges and perspectives, allowing us to align our efforts with their needs," said Peter Tateishi, CEO, AGC of California. "By using these insights, we can guide strategic planning and craft initiatives aimed at strengthening California's construction industry, driving growth through comprehensive workforce development, robust advocacy and leadership programs that champion inclusivity."
Key takeaways from the AGC of California 2025 Optimism Survey include the following insights:
Nearly 63 percent of respondents foresee growth or a moderate increase in overall business activity across California's construction sector in the coming year. Additionally, 7 percent believe the industry will either maintain its momentum or expand further in 2025.
A strong 79 percent of contractors expressed confidence in their own companies' future success in the year ahead, with many respondents predicting revenue and profit increases for 2025. Specifically, 69 percent expect a rise in revenue — 13 percent anticipate significant growth, 26 percent project moderate gains, and 30 percent foresee slight improvements.
Approximately 57 percent of firms plan to increase hiring efforts in 2025. Of that group, 17 percent are preparing for a moderate ramp-up, while nearly 5 percent are poised for a substantial boost in their workforce recruitment.
Approximately 65 percent of respondents are hopeful for a net profit increase next year, with nearly 20 percent expecting stability. Only 15 percent anticipate a decline, reinforcing the industry's overall optimistic forecast.
Many companies are gearing up to capitalize on upcoming market opportunities by enhancing their workforce and deepening their pool of skilled talent.
The survey revealed that 57 percent of respondents plan to intensify recruitment efforts in 2025. Specifically, 35 percent foresee a slight increase in hiring, 17 percent are aiming for a moderate boost, and nearly 5 percent are preparing for significant growth in their recruitment numbers.
On the revenue front, optimism runs high, with 69 percent of firms expecting an uptick in 2025 compared with the previous year. Among them, 13 percent predict a substantial increase, 26 percent anticipate a moderate rise, and 30 percent envision a slight improvement. However, 11 percent project revenues to plateau, while 20 percent foresee a decline.
Profit expectations also remain positive, as approximately 65 percent of respondents anticipate a rise in net profits for 2025. Meanwhile, 20 percent expect stability without change, and 15 percent foresee a downturn.
"Despite concerns among many about the demand for more skilled workers, a large proportion predict that hiring either will remain steady or increase throughout 2025," Tateishi said. "Our workforce development programs are instrumental in equipping future employees with the vital skills needed in this critical industry."
The survey also shed light on the key challenges facing California's construction sector. Among them is the pressing demand for skilled labor, an issue raised by 68 percent of respondents. Regulatory compliance emerged as a concern for 67 percent, while increasing wages and employee benefits added pressure for 51 percent of participants.
When asked to identify their primary focus, workforce pipeline development stood out for 21 percent of respondents, reflecting the importance of nurturing and training the next generation of talent. Regulatory challenges followed closely, with 20 percent deeming these a priority, while 13 percent highlighted unreliable infrastructure investment as their main concern.
These findings underscore a dynamic mix of challenges and opportunities for construction professionals as they prepare to shape the industry in the 2025 year ahead.
For more information, visit www.agc-ca.org.
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