Supply Chain Delays Negatively Impact Civil Contractors in Q1
Latest findings from The Civil Quarterly show despite general optimism, the vast majority of civil contractors are challenged with getting materials to projects; concerned with increasing material costs
HAMILTON, N.J. -- In Q4 2020, Dodge Data & Analytics’ The Civil Quarterly (TCQ) reported that fewer than half (43%) of civil contractors believed fluctuations in the cost of construction materials had impacted their projects at the time. Today’s Q1 report, however, revealed a stark contrast to those findings. The vast majority have negatively felt these impacts, with 71% of civil contractors experiencing serious issues getting materials to projects and 76% now are concerned with cost increases for construction materials over the next six months.
With reports of moderate drops in backlog levels, revenues and profit margins in 2020, civil construction has faired the pandemic reasonably well. In fact, concerns about these three factors leveled off for most respondents by Q1 2021. In addition, 65% of civil contractors are optimistic about the ability of the market to provide new work, up from 58% from last quarter.
However, the positive outlook about new work is counterbalanced by the increased concern about the cost of materials. Over two-thirds (69%) of those who reported some concerns about material costs expect the price of steel to increase, and many also expect increases in the cost of pavement/concrete and aggregates. Lumber and piping were also frequently mentioned by the contractors surveyed. In addition, concerns about the cost and availability of construction equipment have grown, and Q1’s TCQ found that 34% of civil contractors reported impacts from the previous six months due to the cost of equipment, and 43% are concerned that prices are going to continue to rise.
The delay in these direct experiences of supply chain challenges may suggest long-term effects that are harder to rectify. While it is unclear whether this would impact the large infrastructure investments currently recommended by the Biden administration, they may impact the degree to which the civil construction sector can successfully bounce back in the first half of 2021.
In addition to supply chain insights, TCQ also featured an in-depth look and benchmark regarding the ways in which contractors gather and analyze data. The findings reveal an industry that is already seeing the advantages of their use of data but is also still reliant on manual processes. For instance, many still use paper forms for collecting data, especially for safety (38%) and material project delivery (31%). And of those collecting data, 32% manually conduct the actual analysis of it on paper as well, especially around safety.
Despite these limitations, about half of civil contractors report that their data gathering and analysis efforts result in:
- More accurate estimations during the bidding process (56%)
- Reduced rework (52%)
- Better productivity (52%)
- Increased budget performance (51%)
- Improved safety (48%)
TCQ provides a quarterly snapshot of the current business health of contractors operating in this dynamic environment and explores trends in the industry: The report is the result of a partnership with Founding partner Infotech®, Platinum partner Hexagon and Gold partners Command Alkon and Digital Construction Works, and is based on original research collected from civil contractors and engineers. It is available for free download to help all those who have a stake in the U.S. civil construction industry. Future editions will continue to address a wide range of related topics providing a comprehensive view of this complex and ever-changing segment of the construction economy. Click here to download a copy: https://infrastructure.construction.com/.
About Dodge Data & Analytics: Dodge Data & Analytics is North America’s leading provider of commercial construction project data, market forecasting & analytics services and workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities that help them grow their business. On a local, regional or national level, Dodge empowers its customers to better understand their markets, uncover key relationships, seize growth opportunities, and pursue specific sales opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its more than 125-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. Learn more at www.construction.com.
About Infotech®:
Info Tech, Inc., DBA Infotech (Infotech) is a leading SaaS solutions provider for the infrastructure construction industry. Informed by DOT relationships and decades of experience, Infotech develops software solutions that bridge the gaps between owners, consultants, contractors, and other project stakeholders. Whether it be tools for construction administration and inspection or secure online bidding, all of Infotech’s solutions are built to increase transparency, productivity and the availability of data. Infotech is the developer of Appia®, Bid Express®, and Doc Express®, as well as the official contractor for AASHTOWare Project™. For more information, visit infotechinc.com.
About Hexagon:
Hexagon is a global leader in sensor, software and autonomous solutions. We are putting data to work to boost efficiency, productivity, and quality across industrial, manufacturing, infrastructure, safety, and mobility applications.
Our technologies are shaping urban and production ecosystems to become increasingly connected and autonomous - ensuring a scalable, sustainable future. Hexagon (Nasdaq Stockholm: HEXA B) has approximately 20,000 employees in 50 countries and net sales of approximately 3.9bn EUR. Learn more at hexagon.com and follow us @HexagonAB.
About Command Alkon: As the provider of the leading Supplier Collaboration Platform for Heavy Work, Command Alkon solutions deliver supply chain digital collaboration across the heavy construction community. CONNEX, a technology platform built for the industry, enables business partners to automate and integrate business process, capture real-time visibility into heavy material orders and deliveries, and share knowledge to promote certainty of outcomes. Command Alkon is headquartered in Birmingham, Alabama and has offices in locations around the globe. For more information, visit commandalkon.com.
About Digital Construction Works: Digital Construction Works (DCW) is a leading industry application and technology integration services and solution company. We help owner-operators and constructors accelerate the adoption and use of digital workflows, incorporate digital twins of assets, implement best practices, and, if needed, include the right combination of fit-for-purpose third-party technology to improve construction planning, design-build, operations, and project outcomes. We take current disparate applications and integrate them so they all work together, and they can be managed in a single, secure, integrated platform with project insights. DCW has highly skilled subject matter experts from many professional engineering backgrounds who are available for three types of engagements, including advisory services, resident engineer or consultant, or virtual consultant. http://www.digitalconstructionworks.com/
Media Contact:
Lacey Jones
Director, Marketing & Communications
Infotech
lacey.jones@infotechinc.com
