Midsize Construction Firms Expecting More Growth and Business in Coming Year

The outlook for midsize construction firms in 2015 is optimistic, with almost half believing that the construction sector will expand in the coming year.

construction firm worker In a survey conducted by GE Capital, 47 percent of survey respondents reported that business will be brighter for midsize construction firms in 2015, with growth expected throughout the year.

The survey questioned a total of 59 firms with an average number of 662 employees. Revenue of the firms surveyed averaged nearly $144 million.

The construction firms surveyed expressed high confidence in the growth of the U.S. and local markets, but they weren’t as certain of increases in the global market.

Some 70 percent of the construction companies in the survey indicated that their overall financial picture had improved as of September 2014. This number represents a positive change from March 2014, when 60 percent of the firms had seen better financial results.

In addition to improved revenue, 50 percent of the firms responding to the survey reported they were hiring more people to meet demand.

Survey respondents noted that growth is expected in several specific categories, including the energy sector and office and residential construction. Spending on public works projects, including both new construction and renovation, was seen as the greatest potential area of appreciable growth for midsize construction firms.

Capital expenditures were up for 41 percent of the respondents. They also reported significant areas that could affect growth and profitability in the next year, including:

  • Healthcare costs: Rising costs of healthcare and insurance could significantly cut into many midsize companies’ profits.
  • Uncertainty in government spending: The constant fiscal battles in government will make it difficult to forecast revenue or anticipate government contracts.

The most recent and reliable information on building permits and construction industry trends can be found in Construction Monitor‘s weekly insightful reports, including helpful info for midsize construction firms.

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