2022 Marcum Northeast Ohio Construction Survey

EXECUTIVE SUMMARY

A sense of cautious optimism from construction industry leaders nationally is largely mirrored among Ohio-based respondents. Backlogs continue to grow, the federal infrastructure bill is expected to provide a further boost, and regionally in Northeast Ohio there are a number of large projects driving the construction industry forward, including three large jobs at the Cleveland Clinic and three mixed use projects downtown.

Broadly speaking, the industry is finally returning to pre-pandemic levels of activity but is being hampered by three familiar bugaboos – labor challenges, material costs and availability, and supply chain issues. Survey results suggest that more construction companies are facing material shortages and delays even as well over half anticipate expanding opportunities given high overall demand in the space. There are some areas where Northeast Ohio data diverges a bit from our national construction survey results, which we will explore in this report. Overall, however, the challenges and opportunities facing construction companies in Northeast Ohio are remarkably similar to those across the nation. It’s worth noting that we compiled responses prior to the Fed beginning its aggressive fight against inflation, before public markets briefly entered bear market territory, and before the Russian invasion of Ukraine, which has shaken international geopolitics and significantly affected prices of many key commodities – particularly oil & gas. Even accounting for these seismic events, most experts still forecast growth in the U.S. construction industry, with one analysis pegging it at around 8%.

To get there, construction companies will have to overcome considerable hurdles in a very competitive landscape. Looking at the most- pressing issues cited by survey respondents, some themes begin to take shape from the report: • Labor – Finding and retaining talent is a huge problem for most industries, and construction seems especially hard-hit. Securing skilled labor was the biggest threat cited by respondents. We explore this more here in both sidebar articles and later this report for some ideas on retaining and compensation. • Material costs and availability were second only to labor as far as threats to construction businesses. Respondents cited both volatility in pricing and sometimes lack of availability as roadblocks to growth, with material shortages causing delays for well over half of the respondents. • Well over two years since the start of the pandemic, supply chain issues continued to haunt many construction companies, with one respondent summing up a common frustration by saying, “Supply chain delays are making growth difficult.”

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