November 5, 2009

Leaders 2009

2009 Leaders Survey results

Stimulus, staffing, backlog and BIM

Leaders of Canadian general contracting firms are still focusing their sights on the Canadian economy. It was the most important issue that emerged in last year’s survey of nearly 300 contractors and history has repeated itself as the results of this year’s Leaders survey are tallied.

In many cases, gross revenues across the sector increased in 2008, the year represented by the rankings in this edition of The Leaders. Contractors were busy and backlogs were healthy. There is also hope 2009 revenues will be strong, with 75 per cent of respondents expecting the year-over-year top line to be the same, if not better.

For those contractors with a healthy backlog, it was a saving grace in 2009 as firms kept busy eating through it. Coming out of this year, survey numbers show 62 per cent of contractors are expecting to have the same, if not a larger backlog of work to carry over. By comparison, last year at this time 91.5 per cent of contractors were reporting higher or equal year-over-year backlog figures.

Going into 2010, survey results show a glimmer of hope, if not cautious optimism. Nearly a third of you feel that we have hit bottom and are coming out of the recession. Another 40 per cent feel the economic engine will continue to chug at the same pace if not get a little better.

The source of this?

One main reason is government stimulus spending. Despite criticism by many of the slow rollout, stimulus money is starting to flow for projects. And nearly three-quarters of Canadian general contractors surveyed — big and small — have landed or expect to land stimulus-related work.

Contractors are also starting to see signs from the private sector that projects put on hold late in 2008 and throughout 2009 could see renewed life in 2010 as optimism returns. (That optimism was not there 12 months ago as 72 per cent of you were expecting —and rightfully so— the Canadian economy to shrink.)

A positive outlook for 2010 is also shown through employment projections. On the human resources side, two-thirds of firms suggest they will be expanding headcounts next year. The prediction was nearly identical 12 months ago. In reality, however, just 26.6 per cent of firms responding actually did add full-time employees, while 40.6 per cent made no major changes and 32.8 per cent cut staff.

When it comes to public-private partnerships, the hierarchy of size remains in place. Survey results confirm P3 projects, for all levels of government, are continuing to go to the larger firms as 25 per cent of respondents, many of those ranked in the Top 40, were awarded P3-related work in the past 18 months.

Turning to technology, Building Information Modeling is making headway in the contracting community, mostly in the large contractors’ offices. Nineteen per cent of survey respondents report having used BIM on a project in the past year. That is more than double the participation rate over the past 12 months.

Still, it is a little shy of where you expected the industry might be, as The 2008 Leaders survey reported nearly over a third of contractors expected to be working with BIM this year. Time will tell if the 42 per cent of you who expect to be doing a project with BIM applications in 2010 really do.

Stay tuned for Leaders 2010.

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