Early numbers for 2022 show hiring, cash flow up substantially
September 6, 2022 By Staff
Trimble Viewpoint just released their latest Q1 2022 Construction Metrics Index, which provides trends related to project starts, hiring, contract values and cash flow metrics pulled from roughly 1,000 North American Viewpoint clients during Q2 of 2022.
Two trends that are noteworthy relate to hiring, which is up across the industry, regionally and by vertical. Cash flow also increased substantially, demonstrating that contractors are likely gearing up to launch new projects, many of which are coming online as part of the recently passed $1 trillion-plus Bipartisan Infrastructure Law in the U.S.
- New projects increased 10% compared to Q4 2021; however, they were down 20% compared to a year ago (Q1 2021)
- New projects for specialty contractors increased 70% compared to Q4 but were down 12% when compared to Q1 2021
- General contractors saw a 14% increase in projects compared to Q4, but experienced a 36% decrease when compared to Q1 2021
- Heavy highways and civil contractors saw a 10% increase in projects compared to Q4, but a 41% decline when compared to Q1 2021
Potential Impact: The slight bumps in new projects from quarter to quarter is heartening, but ongoing challenges like rising material costs, supply chains and economic uncertainty ahead are still preventing a big return to the new project levels seen a year ago.
- Across the industry, Q1 contract values were 17% less than in Q4 2021 and 35% less compared to Q1 2021
- By vertical, heavy highway and civil contractors experienced a 9% increase in contract values compared to Q4, but a 24% decline compared to Q1 2021
- Specialty contractors saw a 16% increase compared to Q4, but a 19% decrease when compared to Q1 2021
- General contractors experienced a 15% decline compared to Q4, and a 9% decline compared to Q1 2021
Potential Impact: This is in line with the contract value trends we’ve seen in recent quarters. That contract values continue to decline speaks to contractors hedging their bets a bit. Many are taking on smaller projects of lesser value in order to reduce their risk exposure while economic uncertainty is in the air and real-world construction challenges like rising materials costs and skilled labor shortages remain.
- Net hiring increased 16% compared to Q4 and 3% compared to Q1 2021
- Hiring for specialty contractors increased 1.8% compared to Q1 2021
- Heavy highway and civil contractor hiring increased 1.5% when compared to Q1 2021
- Hiring for general contractors increased 0.5% compared to Q1 2021
- Regional hiring increased 1.15% compared to both Q4 and Q1 2021.
- Most regions saw modestly positive gains; however, five states accounted for 34% of new hires, including California, Texas, Florida, Pennsylvania and North Carolina.
Potential Impact: Not only is hiring up quarter over quarter, it’s up year over year. While contractors are hesitant to jump feet first into multiple big projects (often opting instead for smaller slices of new work or tackling existing backlogs), they appear to be full steam ahead with ramping up their workforces. This makes sense as it allows time for contractors to ramp up their teams and prepare for the larger projects a little further down the line.
Cash Flow Trends:
- Cash flow increased 25% compared to Q4, and increased 28% compared to Q1 2022
- Cash flow for general contractors increased 31% compared to Q4 and 33% compared to Q1 2021
- Cash flow for specialty contractors increased 11% compared to Q4 and 57% compared to Q1 2021
- Cash flow for heavy highway and civil contractors increased 11% compared to Q4 and declined 7% compared to Q1 2021.
Potential Impact: The trend in cash flow is perhaps one of the strongest positive indicators we’ve seen in years. Now, as the worst of the pandemic appears to be waning, contractors appear ready to start spending again. These double-digit cash flow increases in Q1 signal that confidence is high, despite industry challenges and economic uncertainty remaining. Big projects await, and contractors in all verticals appear eager to get started.
Print this page