Looking Ahead to 2017

 OP COMMERCIAL 01By Lou Casale

As we approach the new year, reports across the industry continue to suggest that 2017 will be a great time to be in construction. Several markets across the country are expected to see new all-time highs in construction spending, beating pre-recession levels. The New York Building Congress, for example, forecasts spending on construction this year will reach $43.1 billion, a 26 percent increase from 2015 and the first time that spending will eclipse the $40 billion mark in the city.

In its 8th annual "DNA of an Entrepreneur Report," Hiscox USA found that while small business owners in the construction industry are slightly less optimistic compared to last year, many reported great improvements to their businesses in 2016, with reason to believe that next year will hold even more success. As we begin to close the books on 2016, here's what is top of mind for business owners in the construction industry. 

Optimistic for the future, but cautious: Most business owners in the construction industry are feeling good about the year ahead, with 65 percent reporting optimism for the future. Optimism is slightly down in comparison to last year's report (71 percent in 2015), and owners of small construction businesses are slightly more concerned about the future than small business owners across all sectors polled, at 17 percent versus 14 percent respectively.

Increasing concerns about government support: Fifteen percent of respondents in the construction industry reported concern over government support for small businesses as their top concern for the next 12 months, up significantly versus 2 percent the previous year. 

Financial issues top list of concerns for 2017: Not getting paid by clients (18 percent) and passing on cost increases to customers (18 percent) topped the list of concerns for the coming year. Small business owners in construction also remain concerned about attracting new customers, holding steady this year at 17 percent, compared to 15 percent in 2015.

However, there are reasons to be excited for the new year:

Businesses are growing with an expanding customer base: Most respondents saw their businesses grow over the last year, with 62 percent reporting increases in revenue and 64 percent reporting an increase in profits. Additionally, 73 percent increased their customer base over the past 12 months and 64 percent saw their order book grow.

Quality of life is improving: Fewer small business owners in the construction industry worked more than 60 hours a week, down to 11 percent from 15 percent when last reported. Most worked between 40 to 59 hours a week, with more than half of those managing between 40 to 49 hours. While still high, only 11 percent of construction industry business owners reported taking no vacation days this year, compared to nearly a quarter of respondents (23 percent) previously.

In it for the long haul: Small business owners in the construction industry are in it for the long haul and envision a future for their company beyond their tenure, with 70 percent planning to be in business for the next five years. Of those owners planning to exit their companies in the next five years, only 28 percent plan to shutter their business following their retirement, down significantly from 57 percent the prior year. Thirty-two percent plan to transfer ownership to their children or other family members.

Although there are still some areas of concern, these trends and recent performance point to a positive outlook for 2017. With more certainty as a nation and a continually improving economy, small business owners in the construction industry have plenty of reasons to be cautiously hopeful as they ring in the new year.

Lou Casale is head of communications at specialist insurer Hiscox USA. As a marketing and communications expert, he has created transformative programs for Fortune 500 corporations, startups, and C-level executives. He is a recognized thought leader across all facets of communications, from reputation management and media relations to digital and social media. 

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