1.
Procore Construction Industry Outlook (PCIO):
Eight Predictions for Early 2018
With 2018 upon us, Procore decided to have a look at what we may expect in the
coming months. This calls for the inaugural release of the Procore Construction
Industry Outlook or PCIO, which analyses the expectations within the construction
sector for the next six months.
The PCIO is based on surveys carried out among construction industry leaders from
across the U.S, and the responses are used to generate diffusion indices. The bigger
the value, the better the results; values above 50 represent the signs of optimism.
The analysis deals with eight crucial topics:
1 > Backlog
2 > Profit Margins
3 > Revenues
4 > Construction Materials Prices
5 > Worker Compensation
6 > Apprenticeships
7 > Investment in Worker Training
8 > Availability of Skilled Labor
Based on survey data, the construction spending cycle is set to continue as we enter
2018, with firms reporting plentiful backlog and the accompanying increases in costs.
67PCIO Score
16.38% RISE SIGNIFICANTLY
48.28% RISE MODESTLY
22.41% REMAIN UNCHANGED
12.93% DECLINE MODESTLY
0.00% DECLINE SIGNIFICANTLY
The average company is getting busier. It is
remarkable taking into consideration the nation
is already in its ninth year of recovery, and the
construction cycle does not show signs of abating.
Over the next six months, do you expect your
backlog to:
1 > B A C K L O G

2.
3 > R E V E N U E S
12.93% RISE SIGNIFICANTLY
56.03% RISE MODESTLY
22.41% REMAIN UNCHANGED
7.76% DECLINE MODESTLY
0.86% DECLINE SIGNIFICANTLY
4 >
73
8.62% RISE SIGNIFICANTLY
75.00% RISE MODESTLY
16.38% REMAIN UNCHANGED
0.00% DECLINE MODESTLY
0.00% DECLINE SIGNIFICANTLY
.1
All is looking good in terms of revenues. Well
over half of the surveyed firms expect them to
rise over the next six months. Only one in twelve
believes their revenues are going to decline.
Over the next six months, do you expect your
revenues to:
Construction materials prices are set to rise
over the next six months, according to survey
respondents. However, the respondents
remain positive as three in four indicate the
rise will be modest.
Over the next six months, do you expect
construction materials prices to:
PCIO Score
PCIO Score
68.1
C O N S T R U C T I O N
M AT E R I A L S P R I C E S
59
6.03% RISE SIGNIFICANTLY
37.93% RISE MODESTLY
44.83% REMAIN UNCHANGED
10.34% DECLINE MODESTLY
0.86% DECLINE SIGNIFICANTLY
.5
Despite rising materials and compensation
costs, the ratio of firms expecting margins to
rise to those expecting them to fall is roughly
four to one.
Over the next six months, do you expect your
profit margins to:
PCIO Score
2 > P R O F I T M A R G I N S

3.
6 > A P P R E N T I C E S H I P S
10.34% RISE SIGNIFICANTLY
39.66% RISE MODESTLY
37.07% REMAIN UNCHANGED
12.07% DECLINE MODESTLY
0.86% DECLINE SIGNIFICANTLY
7 >
64
11.30% RISE SIGNIFICANTLY
38.26% RISE MODESTLY
47.83% REMAIN UNCHANGED
2.61% DECLINE MODESTLY
0.00% DECLINE SIGNIFICANTLY
.6
Apprenticeship programs continue to receive
more attention, with half of the respondents
expecting the number of construction-related
apprenticeships to rise over the next six months.
This is an interesting finding, considering the
number of job openings in construction right now
and the issues with apprentice recruitment.
Over the next six months, construction-related
apprenticeships across the nation will:
Apprenticeships tend to be industry-wide
efforts. Nevertheless, companies are also trying
to expand the supply of human capital. Given
the dearth of available talent, it’s not surprising
that roughly half of businesses expect to step up
investment in their worker training programs over
the next six months. Only under three per cent
expect to invest less in worker training.
Over the next six months, your investment in
worker training programs will:
PCIO Score
PCIO Score
61.6
I N V E S T M E N T I N
W O R K E R T R A I N I N G
5 > W O R K E R C O M P E N S AT I O N
3.45% RISE SIGNIFICANTLY
38.79% RISE MODESTLY
56.03% REMAIN UNCHANGED
7.86% DECLINE MODESTLY
0.86% DECLINE SIGNIFICANTLY
Despite the ongoing and intensifying concerns
when it comes to shortages of construction
talent, the vast majority of construction firms
expect worker compensation to either remain
unchanged or rise only modestly over the next
six months.
Over the next six months, do you expect worker
compensation to:
PCIO Score
60.8

4.
Conclusion
Procore’s inaugural Construction Industry Outlook indicates that the construction
spending cycle remains in full force. There are still plenty of bidding opportunities for
construction companies, helping to bolster backlog and revenues.
The respondents are not quite as optimistic when it comes to profit margins. Mostly
due to the rising compensation and materials costs. Still, the diffusion index margins
remains above 50; more construction firms expect margins to increase than decrease.
The industry’s major challenge continues to take the form of a dearth of skilled
labor. This issue has been emerging for years but has never been so serious. With
the elevated retirement and a lack of talent entering various construction trades, the
number of posts that need to be filled is not getting smaller. Although the surveyed
companies expect a rise in investment in apprenticeship and firm-specific training
programs, three-quarters believe securing skilled talent will become even more
onerous during the early stages of 2018.
8 >
0.86% RISE SIGNIFICANTLY
8.62% RISE MODESTLY
14.66% REMAIN UNCHANGED
59.48% DECLINE MODESTLY
16.38% DECLINE SIGNIFICANTLY
However, even with the plans to expand
apprenticeship programs and accelerate firm-
specific training, three in four construction
firms expect that skilled labor will become even
scarcer over the next six months.
Over the next six months, finding skilled labor
will become:
PCIO Score
29.5
S K I L L E D L A B O R
AVA I L A B I L I T Y