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“The most promising trend is seeing backlogs slowly rebound as there are currently 6% to 8% more pending projects in march and April of 2021 as compared to March and April of 2020, which means that new projects are starting, and there is increased confidence in the stability of the market,” said Anne Hunt, director of data and analytics at Viewpoint.
“That said, we’re still seeing declines for other leading indicators, particularly when it comes to contract values and hiring trends, demonstrating that the industry still has some catching up to do before it enters a more normal business cycle.”
Chief Economist Richard Branch from Dodge Data & Analytics echoed these numbers within an op-ed in Commercial Construction & Renovation, stating that from 2019 through Q2 2020, their data demonstrated that the total value of construction starts fell 22%.
Several leading indicators suggest that cautious optimism is justified when looking at Q1 2021 data. Read on for some of the most noteworthy stats and insights from the Q1 2021 Index.
The residual effects of the pandemic are still being felt: Q1 2021 backlogs are 20% below where they were in Q1 2020.
Contract values tend to mirror project trends: As projects decline, so do their values.
Hiring is directly related to project starts: When projects get stalled or cancelled, employees are directly impacted. However, so far in 2021, hiring has been net positive, which means more employees were hired than fired, although it is still 12% below what it was a year ago.
Hiring was down across all three verticals in Q1, and will likely remain down in 2021. That said, we anticipate an uptick in hiring as the weather gets warmer, which is typical for the industry.
Cash flow can be an indication of market confidence, as it demonstrates whether contractors are willing to spend money on projects.
Look for Viewpoint’s Quarterly Construction Metrics Index and associated webinar following the end of each quarter, months ahead of other trend reports.
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