Better Roads Digital Magazine
Issue link: https://read.dmtmag.com/i/102915
Outlook2013 figure year over year. However, states that expect to see more funding totaled 20.3 percent. On the other hand, a very high 73.7 percent of agency respondents say they would look to use more private financing in 2013. More contractors surveyed (45.5 percent) say they expect the amount of work put up for bid in their state to remain about the same than see an increase (28.8 percent, still a promising number) or decrease (25.8 percent). Among agencies, exactly half (50 percent) expect the amount of work to remain the same, but encouragingly 31.4 percent see an increase with only 18.6 percent expecting a decrease. The survey also shows that a lot of contractors expect change in the sort of work available to them from agencies, with 40.9 percent expecting the makeup of the work coming from their state to change, with more of some sort of work and less of others. Among state agencies, 61.9 percent of respondents do not expect changes in work makeup. But many states (43.2 percent) expect to take advantage of increased flexibility in how they spend federal funds offered them under the new MAP-21 surface transportation legislation, something that may change the sort of work and projects that they prioritize. That of course depends on how well and how fast the MAP-21 reforms are implemented. The survey also suggests that contractors have already made strategic changes to deal with the post-recession's slow climb-out as almost three-quarters of them (74.2 percent) see no need to move into new or out of old fields in which they have operated to bring in work. Also encouragingly, 43.9 percent of contractors expect to bring in new equipment in 2013, and 37.9 percent of it will be bought, 15.2 percent rented and 13.6 percent leased. Agency respondents overwhelmingly (75.4 percent) say they expect their equipment fleets to stay about the same size. And it is promising to see about one in four (25.8 percent) contractors expect to employ more people in 2013 and only 18.2 percent expect to have fewer employees, with more than half of those surveyed (56.1 percent) expecting their workforce to stay the same. On the other hand, of those who expect to employ more, more than three quarters (76.5 percent) say it will be "just a few more." A number of industry groups suggested in 2012 that when companies attempted to hire skilled workers in 2013 they could run into problems finding them, as so many skilled workers moved into new areas of work during the recession's peak unemployment months. Our survey's numbers show that there is some concern, with 42.4 percent of replying contractors saying they anticipate a shortage of skilled personnel when they look to expand their workforce. But agency respondents also indicate that they don't foresee too much change in their work with contractors, as 66.9 percent expect to deal with the same number of contracting companies as they did last year, and 68.6 percent say they foresee now changes in the way they work with contractors. . And the experts say… Economists and other assorted seers say 2013 could be a pretty good year - if politicians don't get in its way. The New York Times for example says that, "The nascent housing rebound, the natural gas boom, record profit margins, a friendlier credit market for small businesses, along with pent-up demand for autos and other big purchases, could in combination unleash growth and hiring that the economy needs." Growth forecasts vary from a hesitant 1 percent to an optimistic 3 percent being reached by the end of the year. There is however a consensus of something in the order of 2.5 percent for the year, achieved with a strong fourth quarter after a ploddingly slow first quarter. That Q1 slowness is largely blamed on the same factors that so seriously slowed the last quarter of 2012, including Europe's woes, a slowdown in China's economic growth and companies making moves to be ready for a preparing for the fiscal cliff dive. Most forecasters see the first quarter limping along at about 1 percent, actually much slower than the last quarter of 2012, prior to beginning something of an expansion in summer. According to the Associated General Contractors of America (AGC), just the threat of the fiscal cliff 's tax increases and federal spending cuts affected construction employment. An AGC survey of 551 construction firms between November 28 and December 6 found that 54 percent of firms reported the threat of tax hikes had forced them to adjust their business plans. Among those firms, 67 percent reported postponing hiring, 65 percent reported delaying or cancelling capital expenditures and 32 percent reported having already made layoffs. (Similarly high numbers of companies that had not made these moves say they would if we drove off the cliff.) So a large number of construction companies go into 2013 hobbled by moves the fiscal cliff brinkmanship forced them to make, and others moves into the New Year after a period of watchful waiting that would have limited their strategies. A potential upside is that companies that put off growth plans will probably be able to put them into action as the year progresses. Better Roads January 2013 13