Cobb-based Sterling Seacrest Partners announced that an improving economy has construction companies growing more comfortable about their risk exposure, with respondents reporting in a newly released survey that their “risk sentiment” has dropped to 4.91 on a scale of 1-10.
In the latest “Sterling Seacrest Risk Sentiment Index of the Construction Industry,” most report profit margins slightly better than last year, but concerns about staffing remain their number one issue.
When Sterling Seacrest launched its Risk Sentiment Index in 2015, the risk sentiment level was at a peak of 5.15. It dropped in 2015 and 2016, but jumped again between 2016 and 2017.
Businesses were also surveyed about how recent federal government changes were affecting their businesses:
♦ 58% said the Trump administration’s tariff policy has not affected their business.
♦ 92% said that new tax laws and reductions in corporate taxes have helped their businesses.
♦ As a result of tax changes, companies say they have given their employees raises, purchased new equipment and added staff.
“This year’s Index shows a real decrease in the risk sentiment index,” said Doug Rieder, chairman of Sterling Seacrest Partners. “That seems to indicate stronger confidence in the economy, but what hasn’t changed in the five years we’ve been doing the Risk Sentiment Index is that construction companies are very concerned about having adequate staff for their projects.”
Highlights from the Index
♦ The top four issues in order of concern were staffing at 79%, economic issues 44%, healthcare costs 40% and competition 28%. Issues construction industry executives feel least prepared to deal with right now include staffing, cybersecurity and health care costs.
♦ 20% feel their company’s exposure for risk is lower than a year ago, while 25% feel it’s higher.
♦ 52% say their profit margins are better today than a year ago.
♦ 42% say their pipeline of opportunities is better today than a year ago.
♦ 74% say they are able to build adequate contingencies into their project budgets.
The Sterling Seacrest Construction IndustryRisk Sentiment Index surveyed 82 top executives in Atlanta’s construction industry using SurveyMonkey.com. The survey was conducted summer 2019. Highlights can be found at www.sterlingseacrest.com/2019-construction-risk-sentiment-index.