By the numbers: Contractors say hiring and cash flow are up

By Jenny LescohierJune 28, 2022

The construction industry is proving resilient in the face of problems with supply chains, rising material costs and a shortage of workers The construction industry is proving resilient in the face of problems with supply chains, rising material costs and a shortage of workers (Photo: AdobeStock)

Contractors are hiring more and cash flow has increased significantly so far this year, according to Trimble Viewpoint’s latest Quarterly Construction Metrics Index. 

The Q1 2022 Index provides trends related to project starts, hiring, contract values and cash flow metrics pulled from roughly 1,000 Viewpoint clients during Q2 of 2022.

Data suggests that hiring is up across the industry, regionally and by vertical. Cash flow also increased substantially, demonstrating that contractors are likely gearing up to launch new projects, many of which are coming online as part of the recently passed $1 trillion-plus Bipartisan Infrastructure Law.

Following are some highlights from the report:

Cash flow trends

The trend in cash flow is a strong positive indicator suggesting that as the worst of the pandemic seems to be waning, contractors appear ready to start spending again. Double-digit cash flow increases in Q1 signal that confidence is high, despite industry challenges and economic uncertainty remaining. 

  • Cash flow increased 25% compared to Q4, and increased 28% compared to Q1 2022
  • Cash flow for general contractors increased 31% compared to Q4 and 33% compared to Q1 2021
  • Cash flow for specialty contractors increased 11% compared to Q4 and 57% compared to Q1 2021
  • Cash flow for heavy highway and civil contractors increased 11% compared to Q4 and declined 7% compared to Q1 2021
Hiring trends

Not only is hiring up quarter over quarter, it’s up year over year. While contractors are hesitant to jump feet first into multiple big projects (often opting instead for smaller slices of new work or tackling existing backlogs), they appear to be full steam ahead with ramping up their workforces. This makes sense as it allows time to ramp up teams and prepare for the larger projects further down the line.

  • Net hiring increased 16% compared to Q4 and 3% compared to Q1 2021
  • Hiring for specialty contractors increased 1.8% compared to Q1 2021
  • Heavy highway and civil contractor hiring increased 1.5% when compared to Q1 2021
  • Hiring for general contractors increased 0.5% compared to Q1 2021
  • Regional hiring increased 1.15% compared to both Q4 and Q1 2021
  • Most regions saw modestly positive gains; however, five states accounted for 34% of new hires, including California, Texas, Florida, Pennsylvania and North Carolina
Project trends

A glance at the latest data shows slight bumps in new projects from quarter to quarter, which is encouraging, but ongoing challenges like rising material costs, supply chains and economic uncertainty ahead are still preventing a big return to the new project levels seen a year ago.

  • New projects increased 10% compared to Q4 2021; however, they were down 20% compared to a year ago (Q1 2021)
  • New projects for specialty contractors increased 70% compared to Q4 but were down 12% when compared to Q1 2021
  • General contractors saw a 14% increase in projects compared to Q4, but experienced a 36% decrease when compared to Q1 2021
  • Heavy highways and civil contractors saw a 10% increase in projects compared to Q4, but a 41% decline when compared to Q1 2021
Contract values

Data relating to contract values is in line with trends seen in recent quarters, Trimble Viewpoint noted. That contract values continue to decline shows contractors might be hedging their bets a bit. Trimble Viewpoint said many are taking on smaller projects of lesser value in order to reduce their risk exposure while economic uncertainty is in the air and real-world construction challenges like rising materials costs and skilled labor shortages remain.

  • Across the industry, Q1 contract values were 17% less than in Q4 2021 and 35% less compared to Q1 2021
  • By vertical, heavy highway and civil contractors experienced a 9% increase in contract values compared to Q4, but a 24% decline compared to Q1 2021
  • Specialty contractors saw a 16% increase compared to Q4, but a 19% decrease when compared to Q1 2021
  • General contractors experienced a 15% decline compared to Q4, and a 9% decline compared to Q1 2021

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