Demographics, technology, and succession are some of the key issues that contractors face today. Those who recognize these challenges and understand industry trends will be better positioned to create opportunities in the future.
The 2017 CLA Construction Benchmark Report can help your construction company see where you stand among similar organizations and use your financial information to make decisions. It summarizes data from 377 construction companies with operations throughout the United States. Drawing on data from their financial information, this report provides a brief summary of some key industry trends.
Construction industry trends
Several trends have emerged over the past few years that have a significant impact on construction companies.
- Demographic shifts across the country, combined with the loss of experienced workers and the lack of young employees entering the industry, will continue to produce a serious and persistent labor shortage.
- Using technology advances, such as automation equipment, to capitalize on efficiencies may help offset labor shortages. The application of technology to improve communication between the field and office offers an opportunity to identify the risk of profit fade and apply countermeasures earlier and more effectively.
- Across the industry, the lack of planning for management and ownership succession threatens to become a critical issue as large numbers of employees near retirement. With few young employees and few dedicated leadership development programs, the lack of leadership could have damaging effects industry-wide.
Financial ratios and key performance indicators
The report uses information obtained from our construction contractor clients in four sub-industries: civil contractors, general building, electrical and mechanical, and other specialty. It describes how financial ratios are used, and looks at overall industry trends. The information can be used to compare your company’s ratios to averages across the industry and within your sub-industry. Understanding how your results fit with national trends can spark discussions on strategy, competition, and the future of your company.