2022 Marcum Northeast Ohio Construction Survey

POSITIONING FOR GROWTH

Backlog growth is a strong indication of optimism and future prospects, and 50% of respondents had higher backlogs at the beginning of 2022 when compared to prior year, with 24% expecting more than 15% higher backlogs. Just 24% had lower backlogs – the lowest total in three years. So companies in general are expecting growth. Looking at a company’s top priorities is useful barometer for insight into how it intends to position itself for success. The survey has asked this question three years in a row, so seeing how priorities have shifted reveals some ongoing struggles in stubborn problems with skilled labor and the need to plan and control costs. In fact, organizational and strategic planning were the top answers, followed closely by finding skilled labor solutions. We also can see some new thinking, with significant bumps in certain areas. For example, the number of companies more

closely managing material vendors leapt from 16% in 2021 to 42% this year. Companies restructuring themselves for growth went from 32% in 2021 to 38% this year. In a slight shift from the national survey, just 13% of Northeast Ohio firms plan to get into new construction trades, down from 19% the prior year. That said, a significant group of respondents is also striving to find new geographic markets. And 16% of respondents are seeking M&A opportunities, flat to the prior year. Between the fight for skilled labor, the need to bid on more jobs and opportunities presented by the COVID-19 era, M&A activity could increase, which we explore in our M&A sidebar. The Great Recession of 2008 provides a cautionary tale with respect to sticking to your knitting. Diversifying is great, but in construction it must be done carefully – ensure you’re partnering with people who really know what they’re doing because in this increasingly specialized space it’s only possible to do a handful of things really well.

2022 MARCUM NORTHEAST OHIO CONSTRUCTION SURVEY 14