While most of the building construction sector is facing declining activity in the wake of the coronavirus pandemic, utility construction activity shows surprisingly strong growth.
The findings come from PSMJ Resources, Newton, Mass., a multi-services firm for its architecture, engineering and construction (AEC) clients. The headlined items from the story were predictably negative, especially for the anticipation of second-quarter proposal activity, which equaled the drop from the Great Recession of the mid-2000s.]
PSMJ Resources uses their unique scoring system Net Plus/Minus Index (NPMI) which calculates the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease. Their NPMI scores for heavy civil construction posted significant gains, including:
- Water/Wastewater +20 percent
- Energy/Utilities +15 percent
- Healthcare +10 percent
- Housing +2 percent
- Environmental +0 percent (a fifty/fifty split)
Market sectors with the least proposal activity, according to the study, are:
- Education -30 percent
- Heavy Industry -26 percent
- Government Buildings -13 percent
- Transportation -10 percent
Here’s a look at the history of the scoring system (architects, engineers and contractors) from the Great Recession:
NPMI Values: Do You Expect Q2 Revenue to Increase or Decrease Compared to Q1?
“We’re still a long way from being out of the woods,” said PSMJ consultant Greg Hart in a press release announcing the latest results. “This is the third-lowest quarterly NPMI for proposal activity in the 17-year history of our survey, and while some of the markets and submarkets have remained relatively healthy, most are still struggling.”
Hart added that with proposal activity so depressed, the AEC industry is likely to experience an uneven recovery for at least the next several months. Since the PSMJ Resources study reflects results of a national survey, so your results as a southern California contractor may vary.
By Brendan Slagle, ECA President Email: [email protected]