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
Giants 400 | Oct 23, 2023
Top 190 Multifamily Architecture Firms for 2023
Humphreys and Partners, Gensler, Solomon Cordwell Buenz, Niles Bolton Associates, and AO top the ranking of the nation's largest multifamily housing sector architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report. Note: This ranking factors revenue for all multifamily buildings work, including apartments, condominiums, student housing facilities, and senior living facilities.
Senior Living Design | Oct 19, 2023
Senior living construction poised for steady recovery
Senior housing demand, as measured by the change in occupied units, continued to outpace new supply in the third quarter, according to NIC MAP Vision. It was the ninth consecutive quarter of growth with a net absorption gain. On the supply side, construction starts continued to be limited compared with pre-pandemic levels.
Warehouses | Oct 19, 2023
JLL report outlines 'tremendous potential' for multi-story warehouses
A new category of buildings, multi-story warehouses, is beginning to take hold in the U.S. and their potential is strong. A handful of such facilities, also called “urban logistics buildings” have been built over the past five years, notes a new report by JLL.
Contractors | Oct 19, 2023
Crane Index indicates slowing private-sector construction
Private-sector construction in major North American cities is slowing, according to the latest RLB Crane Index. The number of tower cranes in use declined 10% since the first quarter of 2023. The index, compiled by consulting firm Rider Levett Bucknall (RLB), found that only two of 14 cities—Boston and Toronto—saw increased crane counts.
Office Buildings | Oct 19, 2023
Proportion of workforce based at home drops to lowest level since pandemic began
The proportion of the U.S. workforce working remotely has dropped considerably since the start of the Covid 19 pandemic, but office vacancy rates continue to rise. Fewer than 26% of households have someone who worked remotely at least one day a week, down sharply from 39% in early 2021, according to the latest Census Bureau Household Pulse Surveys.
Contractors | Oct 19, 2023
Poor productivity cost U.S contractors as much as $40 billion last year
U.S. contractors lost between $30 billion and $40 billion in 2022 due to poor labor productivity, according to a new report from FMI Corp. The survey focused on self-performing contractors, those typically engaged as a trade partner to a general contractor.
Urban Planning | Oct 12, 2023
Top 10 'future-ready' cities
With rising climate dilemmas, breakthroughs in technology, and aging infrastructure, the needs of our cities cannot be solved with a single silver bullet. This Point2 report compared the country's top cities over a variety of metrics.
Higher Education | Oct 10, 2023
Tracking the carbon footprint of higher education campuses in the era of online learning
With more effective use of their facilities, streamlining of administration, and thoughtful adoption of high-quality online learning, colleges and universities can raise enrollment by at least 30%, reducing their carbon footprint per student by 11% and lowering their cost per student by 15% with the same level of instruction and better student support.
Architects | Oct 4, 2023
Architects and contractors underestimate cyberattack risk
Design and construction industry firms underestimate their vulnerability to cyberattacks, according to a new report, Data Resilience in Design and Construction: How Digital Discipline Builds Stronger Firms by Dodge Construction Network and content security and management company Egnyte.
Building Materials | Oct 2, 2023
Purdue engineers develop intelligent architected materials
Purdue University civil engineers have developed innovative materials that can dissipate energy caused by various physical stresses without sustaining permanent damage.
