North American construction trends to growth and caution
By Adam FreillConstruction
Latest Trimble research report shows growth in hiring and cashflow in a potentially slowing market.
Trimble Viewpoint’s latest Q1 2022 Construction Metrics Index, which provides trends related to project starts, hiring, contract values and cashflow metrics in North America, indicate growth on a quarter-to-quarter basis, but a dip on a year-to-year comparison for the quarter.
Based on the research, new projects increased 10 per cent compared to Q4 2021, but were off by 20 per cent from a year ago (Q1 2021). Specialty contractors fared somewhat better, rising 70 per cent compared to the previous quarter, but were still off 12 per cent from the same quarter one year earlier. General contractors experienced a 14 per cent increase in projects compared to Q4, but experienced a 36 per cent decrease versus Q1 2021. And heavy highways and civil contractors saw a 10 per cent rise in projects in the quarter, but a 41 per cent decline compared to Q1 2021.
Across the industry, Q1 contract values were lower than in Q4 2021 and Q1 2021, but heavy highway and civil contractors experienced a nine per cent increase compared to Q4. They were still down by 24 per cent compared to Q1 2021.
In the report’s analysis, the authors suggest drops in contract values may be caused by contractors hedging bets and 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 labour shortages remain.
Among the noteworthy trends indicates are that hiring is up across the industry, as is cashflow, with net hiring increasing 16 per cent compared to Q4, and cashflow increasing 25 per cent compared to Q4 (28 per cent compared to Q1 2022).
The report suggests that contractors are likely gearing up to launch new projects, although that figure may be heavily influenced by American projects coming online as part of the recently passed $1 trillion-plus Bipartisan Infrastructure Law.