Construction companies remain consistent in their concern about risk exposure in 2016, with respondents reporting in a new survey that their “risk sentiment” has remained steady at 4.4 on a scale of 1-10 (it was at 4.4 at the end of 2015 as well). The latest “Sterling Risk Sentiment Index” shows that most report improving profit margins, but while they say their concerns about staffing are decreasing, access to adequate numbers of employees continues as the No. 1 business risk.
Businesses were also surveyed about how the current election cycle is affecting their businesses. A majority said “election year uncertainty” was having an impact and most felt that the election of a Republican President would improve their business.
The survey noted other key issues of concern. Financial & cash flow issues saw a significant jump (up 8%), with increased competition and government regulation remaining high.
Highlights from the Summer 2016 Sterling Risk Sentiment Index
Note: Where noted, comparisons are with the December 2015 Sterling Risk Sentiment Index
● The #1 risk issue is remains overwhelmingly staffing, with construction companies struggling to have enough employees to handle projects. But the percentage is at 47 percent, down from 60 percent in Fall 2015 Risk Index. Economic issues ranked a distant second at 20 percent.
● Staffing again was the issue companies reported they felt least prepared to deal with right now (30 percent). Health care costs were next (15 percent), followed by cash flow and financial issues (9 percent).
● 64 percent say their company’s exposure for risk is lower than a year ago, a drop from December’s 71 percent.
● 86 percent of respondents say they have formal strategies in place to manage their risk, up from 74 percent in December.
● 75 percent have reviewed their risk management plans in the last 12 months, down from 69 percent.
The new survey also asked construction companies several general questions:
● 80 percent of those surveyed said that they’d see an improvement in their business if a Republican was elected President. Just seven (7) percent said Democrat and ten (10) percent said Libertarian.
● 45 percent said the election year uncertainty affected their businesses. Thirty-seven percent said no and 18 percent didn’t know.
Additional Survey Results
● 84 percent say their profit margins are better today than a year ago
● 88 percent say their pipeline of opportunities is better today than a year ago
● 78 percent say they are able to build adequate contingencies into their project budgets
The Summer 2016 Sterling Risk Sentiment Index surveyed 86 top executives in Atlanta’s construction industry using SurveyMonkey.com. The survey was conducted between July and August 2016.
Related Stories
Industry Research | May 4, 2017
How your AEC firm can go from the shortlist to winning new business
Here are four key lessons to help you close more business.
Engineers | May 3, 2017
At first buoyed by Trump election, U.S. engineers now less optimistic about markets, new survey shows
The first quarter 2017 (Q1/17) of ACEC’s Engineering Business Index (EBI) dipped slightly (0.5 points) to 66.0.
Market Data | May 2, 2017
Nonresidential Spending loses steam after strong start to year
Spending in the segment totaled $708.6 billion on a seasonally adjusted, annualized basis.
Market Data | May 1, 2017
Nonresidential Fixed Investment surges despite sluggish economic in first quarter
Real gross domestic product (GDP) expanded 0.7 percent on a seasonally adjusted annualized rate during the first three months of the year.
Industry Research | Apr 28, 2017
A/E Industry lacks planning, but still spending large on hiring
The average 200-person A/E Firm is spending $200,000 on hiring, and not budgeting at all.
Architects | Apr 27, 2017
Number of U.S. architects holds steady, while professional mobility increases
New data from NCARB reveals that while the number of architects remains consistent, practitioners are looking to get licensed in multiple states.
Market Data | Apr 6, 2017
Architecture marketing: 5 tools to measure success
We’ve identified five architecture marketing tools that will help your firm evaluate if it’s on the track to more leads, higher growth, and broader brand visibility.
Market Data | Apr 3, 2017
Public nonresidential construction spending rebounds; overall spending unchanged in February
The segment totaled $701.9 billion on a seasonally adjusted annualized rate for the month, marking the seventh consecutive month in which nonresidential spending sat above the $700 billion threshold.
Market Data | Mar 29, 2017
Contractor confidence ends 2016 down but still in positive territory
Although all three diffusion indices in the survey fell by more than five points they remain well above the threshold of 50, which signals that construction activity will continue to be one of the few significant drivers of economic growth.
Industry Research | Mar 24, 2017
The business costs and benefits of restroom maintenance
Businesses that have pleasant, well-maintained restrooms can turn into customer magnets.
