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Construction sector makes comeback amid growing optimism, Marcum finds

Company priorities shifted as the US began to recover from the pandemic and the economy reopened, with seven categories ranked lower by respondents this year

Marcum LLP has said that optimism is on the rise amongst the construction sector, amid the industry’s comeback, a rise in GDP and decline in unemployment, according to the findings of its second annual survey of the national construction industry. 

The Marcum National Construction Survey covered a range of topics, including priorities, problems, strategies, possible solutions, and the effects of the pandemic. 

The latest study revealed a “marked uptick” in outlook by construction leaders as compared to the 2020 survey, which was done in the midst of the pandemic.

The backlog of projects is yet to return to pre-pandemic levels for most companies, but many executives said it was improving. 

Some 29% said their backlogs would be higher at the beginning of 2021 than in the same period of 2020, and nearly a third (32%) of respondents said the average size job they bid on in the prior 12 months had increased. More than half (54%) anticipated more opportunities in their regions in the next three years, and 43% expected more opportunities outside their regions.

Company priorities also shifted as the US began to recover from the pandemic and the economy reopened, with seven categories ranked lower by respondents this year. The top three priorities cited for 2021 include strategic planning (57%), finding solutions for skilled labor shortages (41%) and seeking new markets/organizational planning (both with 39%).

Only one in 10 cited the pandemic as a “top threat” to their business and more traditional issues dominated as construction leaders’ top concerns. Topping this was securing skilled labor again led the list of threats, but the level of concern dropped from 34% of respondents in 2020 to 26%this year. 

Joseph Natarelli, national leader of Marcum’s Construction Services practice and office managing partner in New Haven, CT, said: “Survival may have been sufficient at the height of the pandemic, but growth, not just getting by, is the goal for many construction companies today. 

“Even with the challenges of increased competition, climbing material prices and labor shortages, construction is seeing opportunity with pent-up demand and infrastructure investments.”

He added: “Labor and material costs are the blocking and tackling of the construction industry. The industry faces challenges with both as material prices spike and labor shortages remain. 

“Finding skilled labor, managing price volatility, and mitigating the risks that come with rising costs are top priorities for many respondents. There is also more concern over lack of work, which has not been a prevalent issue for contractors since the post-2008 recession.”

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