December 20, 2001

Survey says it was a good year

With the economy in jitters, and construction one of its casualties, it may be therapeutic to look back on how the construction industry did just over a year ago.

In terms of gross profits, Pacific Northwest contractors last year outpaced national companies by a whopping 27 percent, according to a newly released construction industry survey.

Moss Adams, a Seattle accounting and consulting firm, analyzed the financial statements of 325 West Coast contractors, including those in Washington, Oregon, California and parts of Montana and Idaho. More than 200 are Washington firms.

The analysis covered data from all of 2000 and in some cases, through the end of June 2001. The survey breaks out financial-performance data for commercial, electrical, highway, specialty and mechanical contractors.

Net profit before taxes was also higher in the West compared to the national average last year. Pacific Northwest firms increased their net profit 3.7 percent, while the national average shows an increase of 2.5 percent.

Measured by gross and net profits, these margins represent a three-year high, according to the survey. The Pacific Northwest led the West Coast region in gains in these areas.

Revenues increased in 2001 almost 8 percent on average. Growth is expected next year, too, but at a slower pace of about 6 percent.

Comparisons by base salary averages are also included in the report.

Year-to-year comparisons show that almost every category of employee -- except project managers and office managers -- received salary increases.

Construction superintendents had the largest increase in salary, at about 7 percent. On average, they are paid $67,544.

Both project managers and office managers saw their salaries drop by about 2 percent. They earn $67,928 and $40,021, respectively.

A small minority of owners earn up to $50,000 annually, while about 40 percent earn between $100,000 to $150,000. More than one fifth, or 26 percent, of owners make more than $150,000.

Computer use is also covered in the survey. About 53 percent of construction companies have an active Web page. More than half say they are planning a computer upgrade in the next year. And, despite the shaky state of the economy, the purchase of computer equipment is expected to increase 21 percent to $295,000.

Given the recession, it is perhaps no surprise that contractors reported that competition, shortage of field workers and sources of future work were among their biggest challenges.

The Moss Adams construction industry survey is $100. A scorecard of a company's performance is provided for free with purchase of the survey. Participants will be asked to submit financial statements, which will be evaluated confidentially. For more information, contact Becky Bianco or Elaine Ervin at (206) 223-1820.

Previous columns:

• University Mechanical plugs into young exec, 12-13-2001
• Building a wall -- three bricks at a time, 12-06-2001
• Crane company picks its niche, 11-29-2001
• Retailers buy into energy management, 11-15-2001
• Beyond buckling up, 11-08-2001
• An open-and-shut business, 11-01-2001
• Construction labor market in flux, 10-25-2001
• Local firm takes on big steel, 10-18-2001