2020 Marcum Northeast Ohio Construction Survey

2020 MARCUM NORTHEAST OHIO CONSTRUCTION SURVEY

Financial Snapshot

94 % 51 % 93 % 84 %

of respondents report that their ability to receive financing has increased or stayed the same.

BONDING More than one-half (51%) of all survey respondents report that less than 20% of their work requires bonding, a 12% increase over 2019 respondents, but in line with previous years. The year opened on a strong note, and contractors appear to be riding that wave of optimism. Given the current economic climate and a growing public construction market, it would be logical to expect bonding requirements to increase in the future. It should be noted that none of our post-COVID respondents thought it would be less difficult to obtain bonding. However, 93% of total respondents expect requirements to stay the same or improve—a positive outlook for the industry. We see sureties making underwriting and the ability to obtain additional bonding more difficult. BANK CREDIT As stated above, we asked survey respondents if their ability to obtain financing in the past year has improved, decreased, or stayed the same. Only 6% of respondents state that their ability to obtain financing has decreased. This response, which reflects a healthy lending environment, is in line with survey responses from the past few years. By the time the survey closed, however, there was an uptick in the number of post- pandemic respondents ranking the tightening in bank credit as the biggest threat to their business.

OVERHEAD EXPENDITURES Only 9% of 2020 respondents report a decrease in overhead expenditures year-over-year, which is consistent with national survey respondents. A healthy 52% of respondents report increased expenditures over the past year, 13% higher than 2019 respondents predicted. Fairly consistent with one year ago, 42% of respondents plan to increase expenditures in the coming year, slightly more than national respondents. There is also a 5% increase in the percentage of respondents planning to decrease expenses in the next 12 months, no doubt influenced by economic uncertainty. In fact, the percent of post-pandemic respondents expecting a decrease in the future quadrupled from their pre-pandemic peers and the percentage of those predicting an increase dropped consistently.

of respondents report bonding requirements on less than 20% of their jobs.

of respondents expect bonding requirements to stay the same or improve.

The construction market and opportunities for growth remain strong. - pre - pandemic survey respondent

of respondents plan to increase or maintain their budget for overhead expenditures.

5 5

marcumllp.com

4