Dodge Data report: Heavy civil construction adjusts to COVID-19, but still faces issues

Contractors in the heavy civil construction sector are seemingly adjusting well to the impact of COVID-19, but are still facing supply chain issues and other bottom line challenges, according to a new report by Dodge Data & Analytics.

The survey of 99 contractors between mid-April and mid-May found that most feel optimistic about current business conditions despite the pandemic. More than half are confident about the market’s ability to support new business opportunities over the next year (56%) or two (63%). Contractors also are satisfied with the level of backlog they have.

However, the report found two areas of major concern: changes in profit margin and the availability of skilled workers.

Of those surveyed, more than a third (38%) expect profit margins to decline over the next year, compared to 29% who expect an increase. More than half (60%) are having trouble finding workers to employ and 53% expect that if they do find someone to hire, the cost will increase in the next six months. Almost half (43%) who expect a cost increase say they will have challenges meeting their budget and projects.

The pandemic has brought out the need for more advanced tools and digital processes for the sector, such as:

  • Drones and ruggedized tablets, used by more than half of contractors;
  • Remote or machine control of heavy equipment, used by 42%;
  • Utility detection, used by 40%.

New technology will benefit contractors by providing increased productivity, project management and safety performance. Some disadvantages include the cost of technology (56%), adapting to it (47%) and not having the skills to manage it (40%).

Investing in safety is important to contractors, with approximately two thirds reporting it has become more important over the last two years. Contractors also are relying more on processes and policies over technology to keep workers safe, with more than three quarters reporting they partake in regular safety chats (89%), focus on safety policies on best practices (77%) and emphasize safety culture (77%). Comparatively, 47% are tracking safety data to determine best practices.