Playing it Safe: The Q3/Q4 2023 Quarterly Construction Metrics Index
When we pulled real-time data from 1,000 Trimble customers who entered their data into our Viewpoint ERP systems in Q3/Q4 2023, and compared it against data from the same time period the year prior as well as year-over-year, we saw much of the same patterns as before.
The last 6 months of 2023 saw a decline in project starts and contract values, an increase in cash flow, and a small bump in hiring.
We then asked The Network, Trimble Viewpoint’s customer group, whether these stats mirrored their own experiences, and we got some surprising feedback!
Read on for a snapshot of those data points, alongside anecdotal feedback from the Network to help you make better sense of the current construction landscape.
Project Starts Are Not Necessarily Down Across the Board
According to the Q3/Q4 2023 Metrics Index, new project starts decreased 35% compared to Q3 and Q4 of 2022, and they decreased 28% in 2023 as compared to 2022.
This was most pronounced with heavy highway and civil contractors who saw the largest decline—74% in Q3/Q4 2023. General contractors saw lower declines (27%) while specialty contractors saw the lowest declines (20%).
Most of these declines were similarly reflected year-over-year as well.
When the Network was asked about their project starts, 52% said their projects had increased, 35% said their projects had stayed the same, while only 13% said they had declined. When asked to elaborate, they said:
“We have a backlog of large, multi-year projects and our new project starts remain similar to prior years.”
- “Municipalities are starting to approve projects that they postponed because of COVID.”
- “Our bidders were ramping up for 2024.”
- “We're seeing large multi-family projects being pushed back significantly.”
- “Large projects previously on hold are finally starting up.”
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Many Contractors Experienced Higher Contract Values
Contract value data pulled for the Q3/Q4 2023 Metrics Index showed that contract values decreased 13% compared to Q3/Q4 of 2022, and they decreased 7% year-over-year. This is less dramatic than what was seen in previous quarters.
When Network respondents were asked about their contract values, 61% said they had increased as compared to the same time period last year, 36% said they stayed the same, and only 4% saw decreases.
- “Fewer total projects in heavy highway, but project size has dramatically increased.”
- “A lot larger contracts are popping up.”
Cash Flow Increased For Most Contractors
The Q3/Q4 2023 Metrics Index data showed that cash flow increased 9% in Q3/Q4 and was flat year-over-year, which meant that most contractors held onto cash versus spent it on projects or other capital investments.
46% of Network respondents said their cash flow increased in Q3/Q4, 43% said it stayed the same, and 11% said it decreased.
- “Larger projects generate larger expenses and cash flow monthly.”
- “It varied throughout the year, but spend mostly up!”
- “Billings have increased.”
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Hiring Showed Modest Growth
Hiring increased 1.5% in the Q3/Q4 Metrics Index, yet it modestly decreased 1% when compared year-over-year.
Half of Network respondents said they increased their hiring, 39% stayed the same, while 11% decreased their hiring.
- “We've hired additional project management due to larger project size and scope.”
- “We did a lot of hiring, but we also let go or lost most of those people quickly, lots of turnaround.”
- “Retention is the hardest part.”
- “There is not an easy process to find great candidates, so we are keeping doors open for new talent.”
Copper Prices Decreased in Q3/Q4 2024
The price of copper was relatively stable in 2023, yet the price still dropped by about 4% in the second half of 2023, which could indicate that there is simply less demand for copper.
66% of Network respondents said they paid the same amount of money for copper, 29% said they paid more, while only 4% said they paid less.
To see the full report and find out how your organization compares, download the Trimble Q3/Q4 2023 Construction Metrics Index now.