With 2021 infrastructure investment likely to remain the same as 2020, companies need to prepare for fewer opportunities for growth and increased competition. Here are six steps all heavy civil contractors should be taking now to prepare themselves for the challenges ahead.

 According to our most recent peer group benchmarking, most heavy civil and highway contractors saw positive performance in 2020 despite negative factors like the global pandemic and a national recession. Similar to consumer packaged goods (CPG) companies, e-commerce and other sectors, heavy civil firms entered 2020 with strong project backlogs and bright prospects for the year.

 While some experienced temporary pauses in early 2020 due to work shutdowns, most civil construction work was quickly deemed essential. Many companies were able to complete work faster because of reduced traffic, which meant they burned backlogs quicker than expected. The net result, for many, was a good year, despite the challenges, with strong backlogs heading into the beginning of 2021.

Backlogs Are Up & So Are Concerns

Civil construction firms continue adding to their backlogs and picking up new work, but there is growing concern for what 2021 and 2022 will bring, particularly for public construction markets. Most companies have seen a moderate to significant increase in competition, and 60% say bid prices are decreasing. This is not unexpected headed into a forecast construction decline, when we expect to see companies get more competitive and lower bid prices to build backlog as a cushion.