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Subjects: Contract/Agreement, Product/Service, Survey, Economic News/Analysis

How Civil Contractors Are Managing the Biggest Challenges They Confront Today


The latest edition of The Civil Quarterly (TCQ) from Dodge Construction Network shows that despite ongoing labor issues, business conditions are still very strong for civil contractors, with 77% optimistic about the market continuing to be robust for the remainder of 2023, and 46% expecting to see their profit margins increase in the next six months.

However, the strong construction market can also exacerbate civil contractor's ongoing challenges, such as skilled worker shortages and supply chain challenges. This edition of the TCQ offers new data that reveals how contractors are managing these challenges, including how they are attempting to use technology to improve safety.

The report, produced in partnership with Infotech and Hexagon, is based on a quarterly survey of civil contractors and engineers that examines the business conditions that they face and explores key trends in this sector. This quarter, the two unique topics are dealing with uncertainty and data-driven safety.

When asked to select their top challenges, civil contractors highlighted four issues in particular: shortage of skilled workers (selected by 72%), higher prices for products and materials (55%), shortages of products and materials (47%), and concerns about an economic recession (39%). Given the robust state of the market, it is not surprising that an economic recession trailed after the factors that have been increased to acute challenges in the last year, but a potential recession is still clearly on the minds of more than one out of three civil contractors.

The biggest strategy to manage two of these challenges ? dealing with supply chain issues and the possibility of a recession ? is by controlling the one area that is abundant: the large volume of civil projects currently in the market. The vast majority (83%) will raise prices in their bids on projects to cover the risks of supply chain issues, while most (63%) also intend to be more selective about the projects they choose to bid on to focus on profitability to help them weather the possibility of a recession.

However, raising prices or being more selective about projects are not considered top strategies for managing the ongoing concerns about the skilled worker shortages. Recruitment is instead the top approach. The findings suggest, though, that contractors struggle to know how to respond to this challenge, since no single option for managing it is selected by more than half.

The report also offers new data on other strategies for reducing risk and uncertainty on projects in general. Technology figures importantly in these strategies, with over 70% rating technologies that improve communication and data sharing across the project team as at least moderately useful to reduce risk and over 60% also finding at least moderate value in using technologies that improve data-gathering and analysis on projects. However, the share of contractors using these technologies currently on more than half of their projects (56% and 45%, respectively) is considerably lower than those who believe that they can help to address risk.

The study also examined another way that technology can be used to reduce risk: deploying data analysis to help improve safety on projects. The findings reveal that contractors are just beginning to tap the value of this approach. While 63% of contractors are analyzing data to improve safety, they are split nearly evenly between those who are creating insights to explain what has already happened and those who conduct analysis to help them avoid future hazards and risks. And there is over one third who do not use data analysis currently to help improve safety.

Those who use data analysis are clearly reaping its benefits: 74% report that they are able to better prepare workers to deal with jobsite hazards, 67% report lower recordable injury rates, 60% have increased their ability to reduce the number of hazardous conditions onsite and 57% report fewer near-misses due to the analysis they deploy.

Most of the contractors also expect the industry to use more sophisticated tools involving predictive analytics and artificial intelligence to improve safety in the next three years, although the level of use they expect in the industry far outstrips the use predicted by their own companies. Still, with 47% expecting a moderate to major impact on safety from deploying these tools, it is not surprising that this is the direction that they expect the industry to head in.

The Civil Quarterly provides a quarterly snapshot of the current business health of contractors operating in this dynamic environment and explores trends in the industry. The report is the result of a partnership with Founding partner Infotech® and Platinum partner Hexagon. It is based on original research collected from civil contractors and engineers and is available for free download to inform stakeholders in the U.S. civil construction industry. Future editions will continue to address a wide range of related topics providing a comprehensive view of this complex and ever-changing segment of the construction economy. Click here to download a copy.

About Dodge Construction Network: Dodge Construction Network leverages an unmatched offering of data, analytics, and industry-spanning relationships to generate the most powerful source of information, knowledge, insights, and connections in the commercial construction industry. The company powers four longstanding and trusted industry solutions?Dodge Data & Analytics, The Blue Book Network, Sweets, and IMS?to connect the dots across the entire commercial construction ecosystem. Together, these solutions provide clear and actionable opportunities for both small teams and enterprise firms. Purpose-built to streamline the complicated, Dodge Construction Network ensures that construction professionals have the information they need to build successful businesses and thriving communities. With over a century of industry experience, Dodge Construction Network is the catalyst for modern commercial construction. To learn more, visit construction.com

About Infotech®: Info Tech, Inc., DBA Infotech (Infotech) is a leading SaaS solutions provider for the infrastructure construction industry. Informed by DOT relationships and decades of experience, Infotech develops software solutions that bridge the gaps between owners, consultants, contractors, and other project stakeholders. Whether it be tools for construction administration and inspection or secure online bidding, all of Infotech's solutions are built to increase transparency, productivity and the availability of data. Infotech is the developer of Appia®, Bid Express®, and Doc Express®, as well as the official contractor for AASHTOWare Projecttm. For more information, visit infotechinc.com.

About Hexagon: Hexagon is a global leader in digital reality solutions, combining sensor, software and autonomous technologies. We are putting data to work to boost efficiency, productivity, quality and safety across industrial, manufacturing, infrastructure, public sector, and mobility applications. Our technologies are shaping production and people related ecosystems to become increasingly connected and autonomous - ensuring a scalable, sustainable future.

Hexagon (Nasdaq Stockholm: HEXA B) has approximately 23,000 employees in 50 countries and net sales of approximately 4.3bn EUR. Learn more at hexagon.com and follow us @HexagonAB.


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