Contact: Colleen Bennis, (585) 389-1865, cbennis@mower.com
Rochester, N.Y., January, 2020 – The Bonadio Group’s 2020 State of the Industry survey of New York construction companies and contractors shows the majority of firms (64 percent) expect an increase in their revenue and 27 percent expect their revenue to remain the same this year. The data shows the construction industry is benefiting from the strong economy with 75 percent of contractors reporting that their backlog has either increased or remained the same compared to the previous year. Additionally, 92 percent of respondents report that their average contract size has increased or remained the same since 2018 with most contracts (48 percent) in the $500K to $4.9 million range.
Survey respondents reported that just over seven out of ten contracts (71 percent) are based on a competitive bid process, while nearly three out of ten contracts (29 percent) are negotiated directly with a customer. The data shows that the average number of competitors per bid has decreased since The Bonadio Group’s last survey in 2018 and, as such, construction companies’ bid success rates have also improved.
“We’re encouraged to see that construction companies and contractors are generally optimistic, expecting growth and adding large public and private sector projects to their portfolios,” said Michael Smith, CPA, CFE, Partner and Construction Division Leader, The Bonadio Group. “In addition to their business growth, firms are also focused on implementing solutions for some of the industry’s current top challenges such as the labor shortage, regulatory compliance and the expanding, evolving role of technology.”
When asked to identify the single most important critical issue facing the construction industry today, 65 percent of survey respondents chose attracting and retaining qualified personnel. Nearly three quarters (71 percent) of survey respondents reported their company is struggling to find enough labor to meet their current demands. To combat these challenges and increase qualified labor, 40 percent of companies are focusing on improving company culture, 31 percent are increasing compensation and benefits, and 30 percent are cross-training employees.
Rounding out the top three critical issues were Minority and Woman Business Enterprise (MWBE) compliance (14 percent) and the economy (nine percent). Just over half of the survey respondents (54 percent) report that they are able to meet minimum MWBE participation goals on projects. Similarly, when asked about their economic outlook survey respondents were split, with 45 percent predicting there will be a slowdown in the next two years.
The Bonadio Group’s biennial survey includes results from 100 respondents at construction companies and contractors representing three size categories: small, under $10 million in revenue (44 percent of respondents), medium, $10 to $49.9 million in revenue (45 percent of respondents), and large, $50 million or more in revenue (11 percent of respondents).
The Bonadio Group’s construction division team includes more than 40 accounting professionals who serve more than 350 construction/contractor clients throughout New York State and beyond. The team includes CPAs, tax specialists, Certified Fraud Examiners, CCIFPs and valuation experts. The firm will elaborate on the survey findings at their Construction Industry Conferences in Albany and Rochester on February 4th and 5th, respectively.
For more information, go to https://www.bonadio.com/industries-served/construction
About The Bonadio Group:
Founded in 1978, The Bonadio Group is a nationally ranked Top 50 CPA firm offering accounting, tax, and consulting services to clients of all sizes. The Firm’s professionals deliver practical, proactive, and innovative solutions to help clients reach their financial, compliance, management, and personal goals. The Bonadio Group is the largest independent provider of accounting, tax, and consulting services in upstate New York—with offices in Albany, Batavia, Buffalo, East Aurora, Rochester, Syracuse, and Utica. The Bonadio Group also has offices in New York City, Rutland, Vt., and Dallas. For more information, visit www.bonadio.com.