Construction Executive - September 2016 - 12

CONSTRUCTION MARKETS Capitalizing on Market Intelligence BY DR. PERRY DANESHGARI AND DR. HEATHER MOORE CONSTRUCTION EXECUTIVE | SEPTEMBER 2016 12 Market Intelligence Measuring the construction market is a multi-dimensional feat, and none of the dimensions are covered by any single source of data. The most all-encompassing measurement of how much work is available to contractors is construction put in place (CPIP), as reported by the U.S. Census Bureau. The contribution of the industrial, commercial and residential markets to the overall market size has shifted during the last several decades and even within the past few years (Figure 1). Not only are markets shifting nationally, but regional and local factors also paint a different picture for each company. Further breakdown is needed to show available work and trends in specific market categories. So, how can this market intelligence be used as an advantage? Let's create an example of West Coast Contracting, a mid-size U.S. Total Construction Markets Segment Trends Industrial Commercial Residential 60% Percent of Total Construction Market 50% 40% 30% 20% 10% 2015 2009 2003 1997 1991 1985 1979 1973 1967 1961 1955 0% 1949 W inning battles requires good strategy and solid tactics. In a military setting, strategy builds on the mission and intelligence gathered about the terrain, enemy and conditions, while tactics translate this intelligence into a plan of action. In construction, contractors build their strategy on market data that illustrates trends, shifts and projections. This intelligence can lead to tactics for taking advantage of a certain market using the flexibilities of being open shop, plus utilizing technology onsite to ensure profitability and success. FIGURE 1 open shop general contractor with offices in Portland, Ore., Northern California and a small operation south of Seattle. Assume West Coast Contracting used a market study to determine the CPIP and its segments, and then went one step further to study the growing commercial segment and its breakdown (Figure 2). The results show they have a growing opportunity in the general commercial market, which includes automotive, food and beverage, and small and large retail shops. At the same time, while the office market is strong, the manufacturing market is in its fifth year of decline, and some relatively small markets are increasing and ripe for growth. Assume West Coast Contracting has no history in the general commercial market, has some presence in the office market, and its current strength is in the education market. In addition, the company is working with a long-time customer in the pharmaceutical market that is getting tougher to work for and make a profit. West Coast Contracting must gain a foothold in these growing markets to ensure profitability and backlog for the next few years. Strategy and Tactics To Gain a Foothold The strategy begins with market intelligence, but also requires a plan of attack. In the case of West Coast Contracting, by studying the market categories and their geography, it is clear the firm will face tough competition if it competes head-to-head for office and commercial work in any of the

Table of Contents for the Digital Edition of Construction Executive - September 2016

Industry Insider
In Brief
Washington Update
Construction Markets
Risk
Safety
Workforce
No Bounds to Success
Special Section: Construction Technology
Business Development
Community Outreach
Viewpoints
Construction Executive - September 2016 - Cover1
Construction Executive - September 2016 - Cover2
Construction Executive - September 2016 - 1
Construction Executive - September 2016 - 2
Construction Executive - September 2016 - 3
Construction Executive - September 2016 - 4
Construction Executive - September 2016 - 5
Construction Executive - September 2016 - Industry Insider
Construction Executive - September 2016 - 7
Construction Executive - September 2016 - In Brief
Construction Executive - September 2016 - 9
Construction Executive - September 2016 - Washington Update
Construction Executive - September 2016 - 11
Construction Executive - September 2016 - Construction Markets
Construction Executive - September 2016 - 13
Construction Executive - September 2016 - 14
Construction Executive - September 2016 - 15
Construction Executive - September 2016 - Risk
Construction Executive - September 2016 - 17
Construction Executive - September 2016 - 18
Construction Executive - September 2016 - 19
Construction Executive - September 2016 - Safety
Construction Executive - September 2016 - 21
Construction Executive - September 2016 - Workforce
Construction Executive - September 2016 - 23
Construction Executive - September 2016 - 24
Construction Executive - September 2016 - 25
Construction Executive - September 2016 - No Bounds to Success
Construction Executive - September 2016 - 27
Construction Executive - September 2016 - 28
Construction Executive - September 2016 - 29
Construction Executive - September 2016 - 30
Construction Executive - September 2016 - 31
Construction Executive - September 2016 - 32
Construction Executive - September 2016 - 33
Construction Executive - September 2016 - 34
Construction Executive - September 2016 - 35
Construction Executive - September 2016 - 36
Construction Executive - September 2016 - 37
Construction Executive - September 2016 - 38
Construction Executive - September 2016 - Special Section: Construction Technology
Construction Executive - September 2016 - 40
Construction Executive - September 2016 - 41
Construction Executive - September 2016 - 42
Construction Executive - September 2016 - 43
Construction Executive - September 2016 - 44
Construction Executive - September 2016 - 45
Construction Executive - September 2016 - 46
Construction Executive - September 2016 - 47
Construction Executive - September 2016 - 48
Construction Executive - September 2016 - 49
Construction Executive - September 2016 - 50
Construction Executive - September 2016 - 51
Construction Executive - September 2016 - 52
Construction Executive - September 2016 - 53
Construction Executive - September 2016 - 54
Construction Executive - September 2016 - 55
Construction Executive - September 2016 - 56
Construction Executive - September 2016 - 57
Construction Executive - September 2016 - 58
Construction Executive - September 2016 - 59
Construction Executive - September 2016 - 60
Construction Executive - September 2016 - 61
Construction Executive - September 2016 - 62
Construction Executive - September 2016 - 63
Construction Executive - September 2016 - 64
Construction Executive - September 2016 - 65
Construction Executive - September 2016 - 66
Construction Executive - September 2016 - 67
Construction Executive - September 2016 - Business Development
Construction Executive - September 2016 - 69
Construction Executive - September 2016 - 70
Construction Executive - September 2016 - 71
Construction Executive - September 2016 - Community Outreach
Construction Executive - September 2016 - 73
Construction Executive - September 2016 - Viewpoints
Construction Executive - September 2016 - 75
Construction Executive - September 2016 - 76
Construction Executive - September 2016 - Cover3
Construction Executive - September 2016 - Cover4
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