Maryland’s 2016 Construction Industry Outlook
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Transcript of Maryland’s 2016 Construction Industry Outlook
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
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.
INDUSTRY OUTLOOK FOR 2016BY 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
INDUSTRY OUTLOOK FOR 2016BY 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
$4M
$5M
$6M
$7M$
7.4
M
$7.3
M
$5
M
$6
M
$6
.1M
$6
.3M
$7.1
M
$5
.1M
$5
.6M
AV
ER
AG
E S
ALE
S
Start of great recession
GROSS MENDELSOHN CONSTRUCTIONINDUSTRY BAROMETER
ORGANIC GROW TH
15%
18%
20%
23%
25%
28%2
6.7
%
27.0
%
23
.3%
20
.4% 17.4
%
18
.3%
22
.9%
17.0
%
19
.8%
Start of great recession
AV
ER
AG
E G
P%
GROSS MENDELSOHN CONSTRUCTIONINDUSTRY BAROMETER
PROFITABILIT Y
TOP CONCERNS FOR 2016
Finding and retaining good employees
Competition for experienced labor &the economy
Profitability38%
42%
54%
#1 REASON EMPLOYEES LEAVE
30%of respondents say the
#1 reason employees
leave their company is
because they can get
more money elsewhere
42%of firms with less than
$1M in revenue will not
be giving salary
increases in 2016
SALARY INCREASE EXPECTATIONSBY FIRM SIZE
Give EVERYONE performance reviews
Give SOME performance reviews
Give NO performance reviews18%
41%
41%
PERFORMANCE REVIEWS
of all survey participants say
they have employees on staff
who should be terminated29%
TERMINATING EMPLOYEESBY ALL PARTICIPANTS
of companies reporting
$50M-$100M in revenue say
they have employees on staff
who should be terminated
50%
TERMINATING EMPLOYEESBY FIRM SIZE
100%Heavy highway
84%General contractors
69%Subcontractors
ESTIMATES ARE RIGHT ON TARGETBY CONTRACTOR T YPE
TAKES ADVANTAGE OF TAX CREDITS
8%
Not sure
82%
Section 179DEnergy Efficiency
6%Section 41 R&D
4%Section 199 DPAD
One fifthof survey participants
were hacked last year
COMPUTER HACKS IN THE PAST YEARBY ALL PARTICIPANTS
of survey respondents say their
company doesn’t have a
stockholders’ agreement that has
buy-sell provisions
STOCKHOLDERS’ AGREEMENT
62%
More strategic planning and
developmental work relative to employee
issues and concerns
RECOMMENDATIONS
Take a closer look at f irm culture issues
Revisit compensation and benefits
Implement a company-wide employee
review program
RECOMMENDATIONS
Attempt to increase pricing modestly
Ensure profitability of new work by
enforcing fundamental business principles
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
Engage the ser vices 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
wor th
CO
NTA
CT
ME
410.685.5512
www.gma-cpa.com
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