Energy, commercial sectors spur mid-sized contractors’ 2015 optimism

Sources: GE Capital, Americas; CP staff

Surveying construction executives of firms ranging from $10 million–$1 billion in annual revenue, equipment finance giant GE Capital finds 75 percent of respondents “extremely” or “somewhat” confident in their local economies, and 65 percent indicating the same for the U.S. Respondents see energy-related construction the strongest sector in the next 12 months, followed by office, transportation and residential.

Half of the executives surveyed have increased headcount over the past 12 months, as the industry experienced 5.4 percent, year-over-year growth in mean total employment—up two points from trends GE Capital gauged in March. Nearing 2015, capital expenditures are top-of-mind for mid-sized contractors, with 41 percent of executives surveyed confirming year-over-year equipment investment increases, and about one third weighing financing for additional purchases.

Healthcare costs are a top concern at middle-market construction firms, along with uncertainty of government actions—particularly as it relates to public construction project spending. With more than one-third of firms GE Capital surveyed expecting an increasing cost structure in 2015 operations, the ability to maintain or grow margins is a looming challenge. From 2014 to 2015, the more optimistic respondents see margin growth averaging 3.7 percent.

The average revenue and headcount of the 59 survey respondents was $144 million and 642. In partnership with the Ohio State University Fisher College of Business, GE Capital maintains the National Center for the Middle Market, whose quarterly updates of contractors are part of the U.S. CXO Industry Economic Outlook Survey, covering construction plus seven other business or consumer sectors. A leading resource on the U.S. middle market economy, the Center provides knowledge, leadership and innovative research; its quarterly Middle Market Indicator gauges business performance and economic outlook of 1,000 C-suite executives. —;