The strong economy of recent years contributed to that projection, with 62 percent of contractors responding that their backlog increased or remained the same year over year. At the same time, decreased optimism about the economy this year led to 48 percent of respondents believing revenue will stay the same or decrease in 2022.
The survey shows a strong majority of respondents were profitable in 2021 at 90 percent, the same percentage of respondents stating that field productivity actually decreased or remained the same from the previous year. The lack of availability of skilled labor was overwhelmingly cited as the reason for the productivity decline.
The ongoing labor shortage was cited as one of the most significant challenges this year, with 75 percent of respondents reporting their company is struggling to find workers to meet project demands. Other critical issues facing the industry that respondents identified as extremely important were supply chain constraints (70 percent) and the rising costs of materials (60 percent).
“The number of firms reporting profitability in 2021 and a generally positive outlook for 2022—despite a series of significant challenging conditions beyond their control—speaks to the remarkable resiliency of the construction industry,” said Michael Smith, CPA, CFE, Partner and Construction Team Leader, The Bonadio Group. “That said, contractors must look holistically at the current challenges of the industry and act and plan accordingly.”
The study focused on four key topics for today’s construction companies: critical issues, outlook on the future, profitability, and contracts. The information in the report is designed to help construction industry executives evaluate their position and standing on issues ranging from financial management techniques to economic outlook in order to provide an assessment of whether their organization is competitive with other area construction companies.