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Survey predicts rise in construction volume.

Relief may be in sight for the construction industry in 1993. According to an annual survey of the industry's financial managers, nearly half (47 percent) expect growth in this year's contract volume, compared to only 40 percent who predicted an increase in 1992.

This was revealed in the fourth annual survey conducted by the Construction Financial Management Association (CFMA). CFMA polled approximately 2,900 financial managers at construction companies across the country and received an unusually high response rate of 33 percent.

According to the 950 respondents, the highest anticipated growth markets will be Heavy and Highway construction and Industrial and Non-residential construction. Competition is also tougher as stronger firms expand: nearly one-third (27 percent) of the respondents said they plan to expand into new geographic regions next year, up from 25 percent last year. In addition, more than two-thirds (68 percent) of the financial managers anticipate increased competition from other contractors entering their region; nearly two-thirds (64 percent) expect heightened competition from contractors currently in their region and planning to enter their market.

Other significant findings include:

*Substance Abuse Testing. Testing for substance abuse is clearly on the rise. This year, the percentage of companies with substance abuse testing increased to more than half (52 percent), compared to only 30 percent in 1990 and 43 percent in 1991. The most common reasons for testing were cause (80 percent) and pre-employment (78 percent).

* Industry Challenges. Insurance costs both workers' compensation and medical - were again seen as the industry's greatest challenge, gamering 81 percent of the "vote.' Other significant challenges cited by respondents included sources of future work(49 percent), litigation (37 percent), federal legislation (25 percent) and financing costs (20 percent).

* Focus on Quality. Similar to management trends in other industries, nearly one-quarter (23 percent) of the respondents said they have implemented some version of Total Quality Management (TQM). Those contractors in Industrial and-Non-Residential construction (30 percent) were the most likely to undertake TQM programs, while those in Heavy and Highway construction (18 percent)were the least likely.

* Few Benefits. Only 8 percent of those surveyed said they offer their employees post-retirement benefits. Of those that do, medica insurance was the most common benefit offered.
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Title Annotation:annual survey conducted by Construction Financial Management Association predicts growth in contract volume for 1993
Publication:Real Estate Weekly
Date:Jan 27, 1993
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