Latest Study Shows Civil Entrepreneurs Cautious in Expected Changes in Revenue and Profit Margin
HAMILTON, NJ–(BUSINESS WIRE)–The latest edition of The civil quarterly (TCQ) of Dodge Building Network reveals that entrepreneurs continue to expect an increase in revenue and profit margins, but significantly less since last quarter, potentially due to acute supply chain problems and a potential economic slowdown.
The report, produced in partnership with Infotech and hexagonis based on a quarterly survey of civil contractors and engineers that examines the business conditions they face and also includes two unique topics per quarter exploring key trends in this industry.
Responses from civil contractors regarding their market expectations reveal the following:
More than half (53%) still expect revenue to increase over the next 12 months, which has dropped significantly since last quarter (66%)
Nearly half (45%) expect their profit margin to increase over the next 12 months, but slightly less than last quarter (51%)
In a normal market, these levels of revenue and profit margin expectations would be powerful. However, the decreases in these expectations, compared to the previous quarter, are notable for the lack of correlation with current data indicating the volume of work.
The ratio of the contractor’s current level of arrears to the level he considers ideal is 97, suggesting that he is already close to capacity in his workload. Additionally, 77% report very high levels of confidence in the volume of work in the near future.
Despite notions of a booming market, an indication of what urges caution is that 60% of those who expect reduced revenue and/or profit margin believe that an economic downturn will reduce the number of private projects. This is a significant increase from the 49% reported at the start of 2022. This increase may represent a shift from the assumption that an economic downturn was a short-term problem to the current belief that it will is a longer term problem.
Additionally, contractors continue to report supply chain issues. Almost all (93%) say their construction projects have been impacted by fluctuations in the cost of building materials, and 93% also expect rising building material costs to continue for at least another time. six months.
The combination of these two factors can make entrepreneurs much more cautious about what to expect in the immediate future. However, there are signs that the market will continue to show high levels of activity, as evidenced by the findings of engineers who are experiencing both an overload of pending orders (with a ratio between actual and ideal of 150) and the majority of whom (88%) believe the market will continue to supply them with new work for at least two years.
All of these factors make alternative strategies or ways of doing business increasingly important in the civilian sector. The two special topics included in this quarter’s study both offer ways to help entrepreneurs work more efficiently:
Offsite construction: 50% of contractors find that using offsite construction methods such as prefabrication and modular construction improves the cost of their projects compared to projects that do not use this approach. Additionally, 42% find it improves schedule, 34% improves quality and, perhaps most crucial these days, 30% improves supply chain management.
E-Bidding: The use of bid aggregation services by entrepreneurs increased between 2020 and 2022 by 8 percentage points to reach 88%. While the most important benefit for contractors is the ability to find good bidding opportunities, many also find that it improves the bidding process by making it faster, easier and more reliable.
The civil quarterly provides a quarterly overview of the current business health of entrepreneurs operating in this dynamic environment and explores industry trends. The report is the result of a partnership with founding partner Infotech® and Platinum Partner hexagon. It is based on original research collected from civil contractors and engineers and is available as a free download to inform stakeholders in the civil construction industry in the United States. Future editions will continue to cover a wide range of related topics providing a comprehensive view of this complex and ever-changing segment of the construction economy. Click on here to download a copy.
About Dodge Construction Network: Dodge Construction Network leverages an unparalleled offering of industry-wide data, analytics and relationships to generate the construction industry’s most powerful source of information, knowledge, ideas and connections. commercial building. The company powers four long-standing and trusted industry solutions – Dodge Data & Analytics, The Blue Book Network, Sweets and IMS – to connect the dots across the entire commercial construction ecosystem. Together, these solutions provide clear, actionable opportunities for small teams and large enterprises. Specifically designed to streamline complexity, Dodge Construction Network ensures construction professionals have the information they need to build successful businesses and thriving communities. With over a century of industry experience, Dodge Construction Network is the catalyst for modern commercial construction. To learn more, visit construction.com
About Infotech®: Info Tech, Inc., DBA Infotech (Infotech) is a leading provider of SaaS solutions for the infrastructure construction industry. Informed by DOT relationships and decades of experience, Infotech develops software solutions that bridge the gaps between owners, consultants, contractors and other project stakeholders. From tools for construction administration and inspection to secure online tendering, all Infotech solutions are designed to increase transparency, productivity and availability of data. Infotech is the developer of Appia®, Express Auction®and DocExpress®, as well as the official contractor for AASHTOWare Project™. For more information, visit infotechinc.com.
About Hexagon: Hexagon is a world leader in digital reality solutions, combining sensors, software and autonomous technologies. We put data to work to improve efficiency, productivity, quality and safety in industrial, manufacturing, infrastructure, public sector and mobility applications. Our technologies are shaping production and people-related ecosystems to become increasingly connected and autonomous, ensuring a scalable and sustainable future.