Viewpoint Q1 Index Shows Optimism

May 24, 2021

Viewpoint’s first-quarter 2021 Quarterly Construction Metrics Index indicates “cautious optimism” from anonymized customer data from roughly 1,000 Viewpoint clients.

Following are summaries of key Q1 metrics:

Q1 Project Starts

  • Backlogs are 20 percent below they were in Q1 2020 but are slowly rebounding as there are currently 26,000 pending projects in the Q1 2021 backlog compared to 30,000 pending jobs in Q1 2020.
  • Heavy highway and civil projects had 10 percent more pending projects in March 2021 than March 2020, which could signal a rebound for the vertical.
  • Backlogs for general contractors have largely been holding strong, though there are still about 10 percent fewer pending projects in Q1 2021 as compared to Q1 2020.
  • Specialty contractors had 25-35 percent fewer pending projects in January and February 2021 as compared to January and February 2020. Last year they were able to pick up work left behind by general contractors and were likely to have a service business so their lowered project starts might be the abundance of previous work finally catching up with them.

Q1 Contract Values

  • Contract values have largely held steady since October 2020; however, they still saw a 52 percent decline as compared to Q1 2020.
  • A decline was seen across all three verticals during Q1 2021, with specialty and general contractors experiencing 50 percent declines in contract values, while heavy highway and civil saw a 30 percent decline.

Q1 Labor Trends

  • Hiring has been net positive in 2021, which means more employees were hired than fired, though hiring is still 12 percent below what it was a year ago.
  • Hiring has steadily increased throughout the quarter with net employment up 45 percent in March 2021 as compared to March 2020.
  • Geographically, the Southeast experienced the largest net hiring increase — 103 percent as compared to a year ago — which was followed by the Northeast, which also saw a 75 percent increase.
  • Hiring is likely to remain down in 2021, although there may be an increase in the warmer months, which is typical for the industry.

Q1 Cash Flow

  • Heavy highway and general contractors remained cash positive in Q1, meaning they held onto cash vs. spent it.
  • Specialty contractors were cash negative, spending roughly 150 percent more in Q1 2021 as compared to Q1 2020, which could indicate that they’re more confident that new projects will soon be underway.