An online survey of 200 middle-market construction companies conducted by Nationwide insurance company found that most construction owners are optimistic about business in the coming year despite setbacks due to the COVID-19 pandemic. The survey participant companies are described as having 25 to 500 employees, $10 million to $500 million in revenue or 20-plus fleet vehicles

The survey found uncertainty among respondents for the first few quarters of 2021, with 79% worried about meeting their 2021 revenue goals and 76% concerned about an economic recession leading to lower customer demand. Nevertheless, 84% of owners are optimistic about the upcoming peak season and the ability of their business to meet increased demand.Source: Unsplash

Forty-eight percent of construction owners believe the economy will improve in the next six months and 67% believe their company’s revenue will improve in that time period as well. Sixty percent believe the economy will improve and 75% believe in their revenue will improve in the next 12 months.

The study also showed that during 2020 construction owners invested in new technology for their businesses. Technology was purchased by 92% of owners to meet client needs and by 87% of owners to increase efficiency. Forty-eight percent said they use cloud computing for business, 43% use internet of things systems and 42% use building information management systems.

Forty-two percent use vehicle telematics and of those, 80% believe telematics are critical to business operations. They use telematics to track the overall vehicle runtime or mileage (70%), to evaluate employee driving behavior (67%) and to save on fuel costs (64%).

Not surprisingly, 70% of construction owners indicated that they were negatively impacted by the pandemic, most notably in terms of total revenue (52%), their ability to bid on new projects (45%) and maintaining their workforce (37%).

The pandemic highlighted the necessity of more and better planning as more than 20% of construction owners reported having plans to operate during this time of economic uncertainty — 27% had no plans to navigate site shutdowns and re-openings; 24% lacked a business plan that addressed a potential recession; and 23% experienced a shortage of employees and subcontractors to meet project demand.

The pandemic and subsequent workforce shortages led construction companies to make changes in order to improve continuity and efficiency. One result of the tight labor market is the loosening of screening requirements for new hires. As much as 70% of business owners reported that they have, will or may relax screening criteria, including drug testing, to make up for a lack of qualified candidates.

“COVID-19’s impacts have brought new and existing challenges to the forefront for many construction business owners,” said Linda Stueber, Nationwide’s senior vice president of middle market commercial lines.

The survey took place between January 5 and January 14, 2021, as part of Nationwide's ongoing Agent Authority research series.