Marcum construction survey finds reasons for optimism

New York-based accounting firm Marcum LLP says its first annual Marcum National Construction Survey has revealed an overall “positive outlook by respondents about the current and future state of the industry, despite the COVID-19 pandemic.”

The results are encouraging considering the same surveyed contractors were keenly aware of the challenges in the first half of 2020. “The second quarter of 2020 is likely to prove the worst quarter of our economic lives,” states Anirban Basu, Marcum’s chief construction economist.

Adds Basu, “By February, the nation was already in recession. U.S. GDP declined 4.8 percent for the [first] quarter. Often, construction is spared during the early stages of a broader economic downturn due to a combination of ongoing work and backlog. That didn’t happen this time.”

Basu says some of the optimism pertains to a pre-COVID-19 economy that “was blissful for many contractors.” He adds, “A combination of strong job growth, technology-induced transformation, and healthier state and local government finances, rising incomes, consumer confidence, low inflation, and minuscule interest rates propelled construction spending higher.”

Survey results point to contractors with hopes those same conditions can return. Among the positive survey findings:

• 90 percent of respondents said their ability to receive project financing has increased or stayed the same as compared to last year;
• 82 percent of pre-pandemic respondents projected either the same or higher backlogs for 2020, and post-pandemic that figure remained at 67 percent;
• 85 percent of respondents said they were applying for loans under the Paycheck Protection Program (PPP);
• 56 percent of respondents said their top priority going forward is strategic planning; and
• 37 percent of respondents say they realized tax savings in the past year tied to the Tax Cuts and Jobs Act of 2017.

Concluded Basu, “Construction’s recovery will be far more rapid if two things occur: 1) federal stimulus directed toward state and local governments to help them balance their budgets; and 2) a federal infrastructure investment package.”