2022 Marcum Northeast Ohio Construction Survey

THE COMPETITIVE LANDSCAPE

Given favorable market conditions, it’s not surprising to see an increase in the average size of jobs, with 53% of respondents saying they were working on larger projects in 2021 and just 11% reporting that the average job size had decreased. This tally slightly outpaced national numbers and shows that the industry nationally and regionally has returned to pre-pandemic levels. 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. Winning jobs is more competitive each year since COVID struck and has been trending up for three straight years. This year, 39% of respondents reporting that they bid against 1-4 competitors, 46% saying they bid against 5-9 and 15% bidding against 10 or more – creating an environment that could be hitting margins

as more bidders put the pressure on to submit competitive bids. “Construction opportunities seems to be on the rise but there seems to be more competition than five years ago,” said one respondent. “It’s been 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, though those issues are affecting everyone in the industry. This heavy 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 and increasing M&A activity as companies seek to fill gaps in capacity and capability.

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