Alongside Maryland Construction Network (MCN), Gross Mendelsohn surveyed Maryland construction contractors, gathering insights, trends and outlooks on hot button topics like how other firms feel about their future, trends in personnel development, tax deductions and credits that other contractors are taking advantage of and more. This 2016 survey garnered responses from over 200 Maryland construction contractors, resulting in data and insights far beyond anything typically available in the industry. The results of the survey were first released in this presentation by Gross Mendelsohn’s Construction Group Director, Steve Ball, CPA.

1. MARYLAND’S 2016
CONSTRUCTION
INDUSTRY OUTLOOK

2. INTRODUCTIONS
Steve Ball, CPA, CVA, CCIFP
Partner and Director of
Gross Mendelsohn’s
Construction Group
32 years of public accounting
experience in the construction
industry

3. THE SURVEY

4. SURVEY TOPICS
Outlook and Trends
Human Resources and Personnel Development
Accounting, Finance and Tax
Technology
Exit and Succession Planning
Recommendations
1.
2.
3.
4.
5.
6.

5. WHOPARTICIPATED
Over 200
provided responses
Over 1,000
asked to participate

6. WHOPARTICIPATED 42%
Owners/CEOs
18%
CFOs/Accountants
40%
Other

7. WHOPARTICIPATED
63%
Subcontractors
34%
General contactors
3%
Heavy highway

8. WHOPARTICIPATED 50%
< $10 million
37%
$10 - $50 million
13%
> $50 million

9. WHOPARTICIPATED 41%
< 25 employees
21%
26 – 50 employees
38%
> 50 employees

10. OUTLOOK AND TRENDS

11. YOUR COMPANY’S OUTLOOK FOR 2016
85%
More optimistic
15%
Less optimistic

12. INDUSTRY OUTLOOK FOR 2016
50%
Better
41%
Same
9%
Worse
BY ALL PARTICIPANTS

13. INDUSTRY OUTLOOK FOR 2016
BY ROLE
Nearly 60% of CFOs and senior
finance staff say the industry’s
2016 outlook will be better,
compared to only 47% of
owners and CEOs

14. INDUSTRY OUTLOOK FOR 2016
BY FIRM SIZE
Firms between $2.5M and $5M
had the lowest industry
outlook, with 42% reporting the
industry’s outlook would be
worse for 2016

15. REVENUE EXPECTATIONS FOR 2016
68%
Increase
21%
Same
11%
Decrease

16. $4M
$5M
$6M
$7M $7.4M
$7.3M
$5M
$6M
$6.1M
$6.3M
$7.1M
$5.1M
$5.6M
AVERAGESALES
Start of great
recession
GROSS MENDELSOHN CONSTRUCTION
INDUSTRY BAROMETER
ORGANIC GROWTH

17. 15%
18%
20%
23%
25%
28% 26.7%
27.0%
23.3%
20.4%
17.4%
18.3%
22.9%
17.0%
19.8%
Start of great
recession
AVERAGEGP% GROSS MENDELSOHN CONSTRUCTION
INDUSTRY BAROMETER
PROFITABILITY

18. TOP CONCERNS FOR 2016
Finding and retaining
good employees
Competition for
experienced labor &
the economy
Profitability38%
42%
54%

19. IMPACT OF ELECTION ON BUSINESS
26%
Positive
63%
Neutral
11%
Negative

20. HUMAN RESOURCES AND
PERSONNEL DEVELOPMENT

21. #1 REASON EMPLOYEES LEAVE
30%
of respondents say the
#1 reason employees
leave their company is
because they can get
more money elsewhere

22. TOP THREE BENEFITS OFFERED
83%
Medical
insurance
74%
401(k)/profit
sharing plan
71%
Dental
insurance

23. 21%
Not giving
increases
79%
Giving
increases
SALARY INCREASE EXPECTATIONS
BY ALL PARTICIPANTS

24. 42%
of firms with less than
$1M in revenue will not
be giving salary
increases in 2016
SALARY INCREASE EXPECTATIONS
BY FIRM SIZE

25. Give EVERYONE
performance reviews
Give SOME
performance reviews
Give NO performance
reviews18%
41%
41%
PERFORMANCE REVIEWS

26. COMPENSATION
JUSTIFICATION 89%
Merit/job performance
8%
Cost of living
3%
Tenure at company

27. of all survey participants say
they have employees on staff
who should be terminated
29%
TERMINATING EMPLOYEES
BY ALL PARTICIPANTS

28. of companies reporting
$50M-$100M in revenue say
they have employees on staff
who should be terminated
50%
TERMINATING EMPLOYEES
BY FIRM SIZE

29. ACCOUNTING, FINANCE AND TAX

30. 75%
On target
16%
Underestimate
9%
Overestimate
ESTIMATE ACCURACY
BY ALL PARTICIPANTS

31. 100%
Heavy highway
84%
General contractors
69%
Subcontractors
ESTIMATES ARE RIGHT ON TARGET
BY CONTRACTOR TYPE

32. TAKES ADVANTAGE OF TAX CREDITS
8%
Not sure
82%
Section 179D
Energy Efficiency
6%
Section 41 R&D
4%
Section 199 DPAD

33. AVAILABILITY OF BANK FINANCING
30%
Increasing
63%
Same
7%
Decreasing

34. TECHNOLOGY

35. TOP SOFTWARE PACKAGES
28%
QuickBooks
13%
Timberline
11%
ComputerEase

36. 81%
of survey
respondents say
their company
uses mobile
technology
MOBILE TECHNOLOGY USE

37. One fifth
of survey participants
were hacked last year
COMPUTER HACKS IN THE PAST YEAR
BY ALL PARTICIPANTS

38. Firms making more
than $25M were
twice as likely to be
hacked than
smaller firms

39. EXIT AND SUCCESSION PLANNING

40. EXIT PLANNING
?
57%
of owners say they don’t
have or don’t know if
they have an exit plan

41. SUCCESSOR
70%
of survey respondents
say their firm has not
identified a successor

42. BUSINESS VALUE
30%Less than
of owners say they
know how much their
business is worth

43. of survey respondents say their
company doesn’t have a
stockholders’ agreement that has
buy-sell provisions
STOCKHOLDERS’ AGREEMENT
62%

44. More strategic planning and
developmental work relative to employee
issues and concerns
RECOMMENDATIONS
Take a closer look at firm culture issues
Revisit compensation and benefits

45. Implement a company-wide employee
review program
RECOMMENDATIONS
Attempt to increase pricing modestly
Ensure profitability of new work by
enforcing fundamental business principles

46. Take advantage of tax minimization
opportunities through deductions and
credits
RECOMMENDATIONS
Choose the right software by looking for a
product that reflects your firm’s wants and
expectations

47. Engage the services of IT specialists who
can assess your system and put in
safeguards to protect your firm’s critical
data
RECOMMENDATIONS
Make an exit plan
Know what your business is actually
worth

48. FIELD NET PERFORMANCE
RATING FORM

49. QUESTIONS
?

50. CONTACTME
SBall@gma-cpa.com
410.685.5512
www.gma-cpa.com
FOLLOW US

51. GET THE 2016 MARYLAND CONSTRUCTION
INDUSTRY SURVEY EXECUTIVE SUMMARY
Get data from over 200
Maryland construction
contractors
Download your
copy now