Viewpoint's Q1 2021 Quarterly Construction Metrics Index

Key Year-over-Year Numbers Suggest Cautious Optimism

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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.

Project backlogs show an optimistic trend as there were 6% to 8% more pending projects in April 2021 versus March and April 2020.

“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.

Q1 2021 Project Trends

Project backlogs are rebounding with more than 26,000 backlogged projects in Q1 2021.

The residual effects of the pandemic are still being felt: Q1 2021 backlogs are 20% below where they were in Q1 2020.

  • Backlogs are slowly rebounding; there are 26,000 pending projects in the Q1 2021 backlog, January and February 2021 were much lower than the same period last year; however, we are seeing more pending jobs in March and April 2021 than last year.

Project Trends by Vertical

  • Heavy highway contractors saw a 10% increase in pending projects in March 2021 as compared to the year before, potentially signaling a rebound for the vertical.
  • Backlogs for general contractors have largely been holding strong, though there are still about 10% fewer pending projects in Q1 2021 as compared to Q1 2020.
  • Specialty contractors had 25-30% fewer pending jobs in January and February of 2021 as compared to the same time period in 2020.

Contract Value Trends

Though still down, contract values have held steady since Q4 of 2020.

Contract values tend to mirror project trends: As projects decline, so do their values.

  • Contract values have largely been holding steady since October 2020, which relates to backlogs starting to build back out.
  • Overall values are still down significantly (52%) when comparing Q1 2021 to Q1 2020.
  • The declines in contract values extend to all three verticals. Specialty and general contractors experienced 50% declines in contract values when comparing Q1 2021 to Q1 2020, while heavy highway contractors saw a 30% decline.

Hiring Trends

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.

  • Hiring has been steadily increasing throughout the quarter. March experienced the largest increase: Net employment was up 45% compared to March 2020.

Hiring Trends by Vertical

  • Heavy highway and specialty contractor hiring was down 50% in January and February, with March down roughly 30% as compared to a year ago.
  • General contractor employment was also down by 50% in January and February. However, March 2021 was roughly in line with March 2020, signaling that general contractors are rebounding faster than heavy highway and specialty contractors.
All three verticals saw a 50% decrease in hiring in January and February as compared to a year ago

Hiring Trends by Geography

  • Regionally, there has been an overall net positive for employment in 2021, with the southeast experiencing the biggest net change of 103% as compared to a year ago.
  • Hiring growth in the Northeast has been the most consistent of all regions, with employment staying at or near positive throughout 2020 and into 2021.
  • All other regions show similar positive net growth in Q1 2021, collectively averaging 50% more hiring growth than in Q1 2020.
  • Regional hiring will follow the overall hiring trends, which suggests that hiring will remain down in 2021; however, the Southeast and Northeast might fare better than the Pacific West, Midwest and Plains given their more consistent employment track records.

Cash Flow Trends

Contractors have found ways to remain cash positive amid the pandemic.

Cash flow can be an indication of market confidence, as it demonstrates whether contractors are willing to spend money on projects.

  • In 2020, construction companies were more cash positive than in years past as the pandemic and the uncertain business environment led them to hold on to cash rather than spend it on new projects.
  • Heavy highway and general contractors remained cash positive in Q1.
  • Specialty contractors were more cash negative especially in March, spending roughly 20% in Q1 2021 as compared to Q1 2020, indicating that new projects may be underway.

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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Posted By

Charity Heller leads the Viewpoint content team. She is passionate about engaging new audiences and creating relationships through storytelling, data, strategy, and inclusion.