2020 Marcum Northeast Ohio Construction Survey

2020 MARCUM NORTHEAST OHIO CONSTRUCTION SURVEY

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We are a family company and we only grow from within. We hire apprentices and train them to replace us.

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TOP POLITICAL ISSUES Consistent with years past, and in line with the national construction survey, healthcare and material price volatility are the top two political issues for our 2020 respondents. Healthcare continues to be a turbulent issue, especially in an election year. The uncertainty surrounding material prices was only exacerbated once the pandemic closed down businesses in China, the original epicenter of the virus. The availability of credit replaced income taxes as the third-most important political issue, a ranking it hasn’t held since 2015. This shift doesn’t surprise us given the economic repercussions of the pandemic. Contractors are looking ahead to potentially stricter lending requirements. We also noted a shift in the ranking of minority business enterprise (MBE) and women business enterprise (WBE) contract requirements. After being one of the least important political issues for several years, it was ranked No. 5 by respondents. One explanation could be the $1.5 billion in public projects in progress in Northeast Ohio, including MetroHealth, the Cleveland Clinic and University Hospitals. These companies participate in the community benefit agreements (CBAs) with the city of Cleveland, which set standards for using local labor and contracting firms and, in particular, minority and female workers and firms. The social environment around race and business is likely another contributing factor.

THREATS For the seventh straight year, securing skilled labor was selected as the greatest threat to our respondents’ businesses in the next 12 months, though we did note a 17% drop in those choosing this threat in 2020. The reason? We included the 2020 election as one of the choices this year, and that is where most of those responses went. Once COVID-19 entered the picture, there was more than a 50% drop in skilled labor as a great threat. Instead, lack of work sharply increased and was the No. 1 threat according to post-COVID respondents. Going into 2021, this will be an interesting issue to track. In addition to skilled labor challenges, post- COVID respondents cited material price volatility and the availability of credit for project owners among their greatest challenges.

- survey respondent

We are most focused on improving profit margins and retaining clients until we see the outcome of the 2020 election.

ESOPS For the first time, we asked respondents whether they have explored employee stock ownership plans (ESOPs). Almost one-quarter of respondents were unfamiliar with ESOPs. See our ESOP article to learn how these plans can benefit employees, and how they can serve as a viable transition plan for construction firm owners.

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