Marcum LLP, a leading national accounting and advisory firm, has officially published results from its 2024 Marcum National Construction Survey, which brings forth critical insights into the construction industry’s current state and future outlook based on responses from industry leaders nationwide. Talk about these results on a slightly deeper level, they begin by revealing how federal funding has orchestrated various emerging across the construction industry. In essence, the survey claims that Infrastructure Investment and Jobs Act (IIJA), CHIPS Act, and Inflation Reduction Act are all expected to fuel growth in the sector. On top of that, it informs us on significant federal funding being earmarked for infrastructure, semiconductor manufacturing, and clean energy projects. However, while on one hand it introduces you to ambitious growth brand, Marcum’s research further takes the veil off from a massive shortage in the context of skilled labor. More on the same would reveal how more than 29% of respondents deemed this issue as the biggest threat to their business. Another concerning detailed discovered here is rooted in the decline of office construction, a decline which is largely driven by permanent changes in the white-collar workspace. Conversely, healthcare, education, and renewable energy projects continue to enjoy strong demand. Then, there is the prospect of economic resilience. You see, despite the increase in inflation and cost-of-living, the construction sector has consistently showcased remarkable resilience with healthy backlogs and fewer bidders per job. Such consistency, like you can guess, indicates a strong demand for construction services.
“Every year, we’re proud to provide our readers with practical insights that can have a meaningful impact on their businesses over the following 12 months,” said Roger Gingerich, a partner at Marcum and leader of the Firm’s Midwest construction practice. “This year’s survey is no exception, highlighting top concerns within the industry that can help businesses of all sizes strategize for the future. Getting a sense of the industry’s leading issues can be the encouragement construction firms need to adopt more efficient financial practices, take advantage of overlooked incentives, and generally improve their competitive stance in a rapidly evolving market.”
Having referred to its economic resilience, though, we must also shed some light upon those financial challenges that plague the construction industry at present. For instance, the industry remains pitted against higher interest rates and tightening credit conditions, forming challenges which have already caused numerous project delays and cancellations. In fact, 38% of respondents indicate that securing project financing has been a significant issue. Alongside financial, construction players are also facing severe cybersecurity concerns, forcing them to enhance their cybersecurity measures. Making matters even worse has been the underutilized state of tax incentives, as going by the available details, a sizeable number of construction companies are not taking full advantage of available tax incentives. A more concrete translation relaying the same would say that 37% respondents are not leveraging any of the eight tax incentives specified in the survey.
Hold on, we still have a few bits left to unpack, considering we still haven’t touched upon the study’s discovery of a changing landscape. By that, Marcum’s study touches upon those 65% of respondents who now get just 1-4 bidders on average. This also marks the first time Marcum survey respondents have reported such a low level of competition for projects. Rounding up highlights are succession planning trends observed across the industry, with 49% respondents stating that succession planning is a priority and highlight the importance of preparing for future leadership transitions.
“Our survey reveals that despite the challenges facing the construction industry, the overall outlook remains positive,” said Joseph Natarelli, Marcum’s National Construction Industry Leader. “It was surprising to see how many construction companies and contractors leave money on the table by not utilizing valuable tax incentives and programs. I encourage leaders to explore those opportunities and those created by new technological advances to future-proof their business and brace for potential changes in the outlook.”
