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2019 Construction Risk Sentiment Index Results

2019 Construction Risk Sentiment Index Results

An improving economy has construction companies growing more comfortable about their risk exposure, with respondents reporting in a newly released survey that their “risk sentiment” has dropped to 4.91 (on a scale of 1-10). In the latest “Sterling Seacrest Risk Sentiment Index of the Construction Industry,” most report profit margins slightly better than last year but concerns about staffing remain their number one issue.

When Sterling Seacrest launched its Risk Sentiment Index in 2015, the risk sentiment level was at a peak of 5.15. It dropped in 2015 and 2016 but jumped again between 2016 and 2017.

Businesses were also surveyed about how recent federal government changes were affecting their businesses:

  • 58 percent said the Trump administration’s tariff policy has not affected their business.
  • 92 percent said that new tax laws and reductions in corporate taxes have helped their businesses.
  • As a result of tax changes, companies say they have given their employees raises, purchased new equipment, and added staff.

“This year’s Index shows a real decrease in the risk sentiment index,” said Doug Rieder, Chairman, Sterling Seacrest Partners. “That seems indicate stronger confidence in the economy, but what hasn’t changed in the five years we’ve been doing the Risk Sentiment Index is that construction companies are very concerned about having adequate staff for their projects.”

The top three issues in order of concern were staffing (79%), economic issues (44%), healthcare costs (40%) and competition (28%). Issues construction industry executives feel least prepared to deal with right now include staffing, cybersecurity, and healthcare costs.

  • 20% feel their company’s exposure for risk is lower than a year ago. 25% feel it’s higher.
  • 52% say their profit margins are better today than a year ago
  • 42% say their pipeline of opportunities is better today than a year ago
  • 74% say they are able to build adequate contingencies into their project budgets

 

 Methodology: The Sterling Seacrest Construction Industry Risk Sentiment Index surveyed 82 top executives in Atlanta’s construction industry using SurveyMonkey.com. The survey was conducted summer 2019.