2022 Marcum National Construction Survey

THE COMPETITIVE LANDSCAPE

Given favorable market conditions, it’s not surprising to see an increase in the average size of jobs, with 49% of respondents working on larger projects in 2021 and just 11% reporting that the average job size had decreased. Those projects, however, were often constrained by labor and material limitations. In fact, 89% of respondents said jobs were delayed by either material shortages, labor shortages, or both at some point during the year. Capturing all that work remains as competitive as ever, if not more so, with 38% of respondents saying they bid against 1-4 competitors, 43% bidding against 5-9, and 19% bidding against 10 or more — an uptick of 5% for 10 or more bidders from last year’s report. “Construction opportunities seem to be on [the] rise but there seems to be more competition than five years ago,” said one respondent. “It’s been [a] bit challenging to obtain projects due to the competition.” Adding to the complexity are the ongoing cost increases affecting labor and materials. This often leads to jobs being rebid due to expense changes. This heavy level of competition is somewhat surprising given the high demand for construction work, but in some ways it makes sense. What we’re seeing in the industry is that while smaller contractors are being selective, large companies are going after just about every job. This is increasing joint ventures because large companies need them for capacity. It’s also increasing M&A activity as companies seek to fill gaps in capacity and capability.

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