Everywhere I travel by car lately, mostly in the New York metropolitan area, it seems like I’m doing a detour around a construction site.
For sure it’s a hassle, but it’s one we should all welcome. As our second annual National Construction Survey shows, the construction industry is making a strong comeback, with construction industry CEOs now more optimistic than the same time last year and, in many cases, reporting bigger backlogs and bidding on larger projects. Plus, politics aside, our infrastructure (roads, bridges, tunnels) need some serious upgrading, at least where I live.
There was more positive news in the Annual Survey of Connecticut Businesses, which we sponsor with the Connecticut Business and Industry Association. About two-thirds of leaders at the companies surveyed expect a profitable 2021. 43% expect their businesses to grow—up from 25% last year and the highest percentage since 2018. While labor shortages are still an entrenched obstacle (who among us doesn’t know this firsthand?), 33% still expect to expand their workforces in the next six months, assuming the people are out there to hire. That’s a testament to companies’ confidence in their own ability to find creative solutions to what is probably the number one challenge in the marketplace right now—or perhaps a close second, after supply chain disruption.
Where this is all heading remains to be seen, but with the Dow hitting an all-time high this week following better-than-expected earnings reports, it appears that playing an offensive game is going to be more advantageous in many industries in the next few months than staying in defensive mode. If your company is not finding ways to grow in spite of staffing issues or supply-chain challenges, you risk falling behind your competitors.
That reality isn’t lost on the construction industry CEOs we surveyed. In addition to solving skilled labor shortages, their top concerns are growth-oriented: strategic planning, seeking new markets, and organizational planning. These are universal issues, no matter what industry you’re in.
If you haven’t been able to devote much serious time and effort to these future-oriented activities over the past 18 months, now is the ideal time to put them on your calendar, perhaps by bringing in a facilitator to get your creative juices flowing. Marcum’s professionals all work closely with our clients on this type of planning, and I encourage you to pick up the phone or send an email if you haven’t scheduled your year-end planning review yet. The clock is ticking.
Middle-market companies need to be crystal clear on their direction and growth plans right now, especially when they are contending with staffing gaps, delays in securing critical supplies (caused in part by giant retailers’ over-ordering) and rising costs. The best way to make the most of limited resources is by making sure everyone is aligned and working on what really matters to the growth and profitability of your business, not running off in different directions.
It is also important to invest in the areas of your business that can make or break your ability to set and pursue important goals. As Ethan Brysgel, Marcum’s national financial accounting and advisory services leader, pointed out in a recent media interview, many of the businesses we polled in the Connecticut survey cited employee retention as their single biggest area of investment in 2021. They recognize that it’s impossible to go after their strategic plans without the right people on their teams. For any business owner or manager who’s been around a while, I’m sure that comes as no surprise. Keeping good talent trumps recruiting new talent every time.
I suspect that as we enter the critical holiday selling season in many industries, the signs of economic momentum that these surveys are revealing is only going to pick up—and continue into 2022. There still may be a few detours as we rebuild but most of us have become very skilled at coping with the unexpected. Companies that seize the day are going to have an edge.
Next week is Marcum’s annual (or what used to be annual, pre-pandemic) Partner Retreat and Industry Exchange. Most of our fully vaccinated partners and other executives, totaling about 300 people, will meet in South Florida starting on Sunday for our own version of strategic planning and team-building. It’s the first time we’re getting together as a group in over two years and it’s long overdue. As a result of several mergers in the last two years, some strategic lateral hires at the partner level and just about 50 promotions to partner, about one-third of those attending have never been to a Marcum retreat before. In fact many of them have not met Marcum partners other than those in their own offices. While Zoom has kept us going, nothing takes the place of getting together in person.
Many of us will be in meetings from Sunday morning through lunch on Wednesday, so if we don’t answer those emails, texts and phone messages as quickly as we normally do, you’ll know where we are and what we’re doing.