The Associated General Contractors of California (AGC of California) has released findings from its 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, chief executive officer, 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% of respondents foresee growth or a moderate increase in overall business activity across California’s construction sector in the coming year. Additionally, 7% believe the industry will either maintain its momentum or expand further in 2025.
- A strong 79% 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% expect a rise in revenue—13% anticipate significant growth, 26% project moderate gains, and 30% foresee slight improvements.
- About 57% of firms plan to increase hiring efforts in 2025. Of that group, 17% are preparing for a moderate ramp-up, while nearly 5% are poised for a substantial boost in their workforce recruitment.
- Approximately 65% of respondents are hopeful for a net profit increase next year, with nearly 20% expecting stability. Only 15% 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% of respondents plan to intensify recruitment efforts in 2025. Specifically, 35% foresee a slight increase in hiring, 17% are aiming for a moderate boost, and nearly 5% are preparing for significant growth in their recruitment numbers.
On the revenue front, optimism runs high, with 69% of firms expecting an uptick in 2025 compared to the previous year. Among them, 13% predict a substantial increase, 26% anticipate a moderate rise, and 30% envision a slight improvement. However, 11% project revenues to plateau, while 20% foresee a decline.
Profit expectations also remain positive, as approximately 65% of respondents anticipate a rise in net profits for 2025. Meanwhile, 20% expect stability without change, and 15% foresee a downturn. Commenting on these findings, Tateishi stated, “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. 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 as we approach 2025. Among them is the pressing demand for skilled labor, an issue raised by 68% of respondents. Regulatory compliance emerged as a concern for 67%, while increasing wages and employee benefits added pressure for 51% of participants. When asked to identify their primary focus, workforce pipeline development stood out for 21% of respondents, reflecting the importance of nurturing and training the next generation of talent. Regulatory challenges followed closely, with 20% deeming these a priority, while 13% 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.
