New “Sterling Seacrest Risk Sentiment Index” Indicates Rising Risk Exposure Perception in Construction Industry, Concerns Over Staffing Remain HighJune 04, 2018
Construction companies are growing more concerned about their risk exposure, with respondents reporting in a new survey that their “risk sentiment” has increased to 4.99 on a scale of 1-10 (it was at 4.44 in the spring of 2016). In the latest “Sterling Seacrest Risk Sentiment Index of the Construction Industry,” most report improving profit margins, but their concerns about staffing are increasing and remain the number one issue.
Businesses were also surveyed about how proposed federal changes might affect their businesses.
- 91% say proposed tax changes would most improve their businesses
- When asked how the Trump administration is affecting their business, 49% said it was improving, 47% said hurting, and four percent are not seeing an effect.
- When asked what they would like President Trump to do to improve the construction industry, 71% cited “lower corporate taxes,” with 16% looking for more programs to train workers in the industry.
“We saw a significant jump in the risk sentiment index in these results, but even with that jump the risk sentiment index isn’t as high as when we began surveying companies in 2015,” said Doug Rieder, president, Sterling Seacrest Partners. “This indicates better economic times are being experienced by most respondents. Bigger backlogs and higher margins do a lot to reduce perceived business risk in construction.”
Highlights from the Index
The top four issues in order of concern were staffing (63%), economic issues (12%), cash flow/financial (8%) and competition (6%). Issues construction industry executives feel least prepared to deal with right now include computer hacking and security and healthcare costs.
- 57% feel their company’s exposure for risk is lower than a year ago. 43% feel it’s higher.
- 78% say their profit margins are better today than a year ago (down from 84% in 2016)
- 79% say their pipeline of opportunities is better today than a year ago (down from 88% in 2016)
- 71% say they are able to build adequate contingencies into their project budgets (down from 78% in 2016)
Methodology: The Sterling Seacrest Risk Sentiment Index surveyed 86 top executives in Atlanta’s construction industry using SurveyMonkey.com. The survey was conducted late fall 2017.