Following the COVID-19 pandemic and global lockdown of the past few years, the construction industry was finally looking up as starts increased and infrastructure investments were made. Though the industry has continued to battle ongoing labor shortages and supply chain delays, overall, things were looking better. However, many firms with a fiscal year end of June 30 have begun reporting losses, lowering the industry outlook.
Progress Not Perfection
Many attribute the losses to ongoing recovery from the pandemic. While the discovery of losses is unfortunate, some organizations have taken it as a sign of progress. Though losses were reported, many still saw an improvement from the first half of the fiscal year. Moreover, the past few years have forced organizations to reevaluate their dynamic, including making improvements with regard to investments, work, and organization membership.
Opportunities for Improvement
Some key points to take away from the last few years and our ongoing recovery efforts include diversifying client and sector portfolios. The pandemic could be especially detrimental to firms that were too siloed into a specific client type or sector. Expanding your firm’s portfolio allows for reduced risk of closing shop when faced with certain setbacks. The pandemic also illustrated how to best run a lean organization and still be effective and efficient. Though labor shortages are impactful to project timelines, being able to adapt to a lean organization and make it work also allows for greater agility with clients.
Looking Forward
Looking forward, it is important to remember that it takes time to fully recover and losses also present opportunities for improvement. The construction industry is expected to continue to get better as the consequences of the pandemic subside and further infrastructure investments are made.