What's Hot, What's Not (A Lot): Q3-Q4 2022 Construction Metrics Index
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Fewer Construction Projects, Modest Increase in Hiring and Cashflow
Ups and Downs
Decreased Projects, But Modest Hiring and Cash Flow Gains
It was an unpredictable year for the construction industry, as many contractors navigated record inflation, high materia costs, supply chain issues, and a lack of labor that caused many projects to be delayed or halted completely in 2022.
These challenges were reflected in Trimble Viewpoint’s Q3-Q4 Construction Metrics Index as new projects and contract values declined quarter-over-quarter—40% and 45% respectively—demonstrating the difficult business environment that dominated most of 2022.
However, both hiring and cash flow saw modest gains, potentially indicating that contractors are ramping up their workforces and spending money on projects and/or on other investments in preparation for more projects coming online in 2023.
Hiring was up 1% at the end of the year, while cash flow decreased 16% compared to the same time period the previous year.
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Heavy Highway and Civil Contractors Most Negatively Impacted
Projects and contract values were down throughout 2022 for all verticals, with the largest decreases coming at the end of the year.
This was especially true for heavy highway and civil contractors who saw the biggest slowdowns in projects—a 60% decrease for Q3 and Q4 and 73% decrease for Q4 alone. This could be attributed to the slower-than-expected pace of federal infrastructure funding from the U.S. Bipartisan Infrastructure Law.
Heavy highway and civil contractors also hired less than the other verticals, and they held on to the most cash, further indicating their trepidation towards the current business environment. This situation may change as federal infrastructure funding gets distributed more readily in the coming year.
Gains in Hiring and Cash Flow Show Positive Momentum
On the flip side, most verticals saw modest hiring gains, which could be a positive sign for the industry given the fact that finding qualified labor has been an issue for a long time. Interestingly, hiring was mostly consistent, even across verticals and regions, suggesting that challenges remain ubiquitous across the country.
In the same vein, most verticals, with the exception of heavy highway and civil contractors, saw a decrease in cash flow, indicating that they’re spending money on things like labor, projects and other investments in anticipation of conducting more work in the coming year. Hopefully this is a positive omen of what’s to come as we step into 2023.
To get the whole picture of the construction industry, and see how your organization compares, download the Q3-Q4 Trimble Viewpoint Construction Metrics Index now.
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