Construction Update: Will Economic Challenges Bring Greater Consolidation?

How are things going,” you ask? Well, the drop-off volume in the fourth quarter of 2009 has continued into 2010. AGC has gone on record, stating that construction spending has dropped to 2002 levels. Couple this with increased competition from contractors outside our traditional markets, and that spells trouble.

This area has a significant amount of contractors that have a fair amount of revenues. However, other areas have fewer contractors, but they are much larger in terms of revenues. Some believe that so much capital spending occurs by universities and health care systems in this area, that these institutions do not concentrate their spending with a few contractors. Rather, they spread it around to many contractors, hence the reason for so many contractors in this region.

With so many contractors and so little work, I wonder if consolidations, mergers and acquisitions will occur within this industry. Consolidations occur all the time in other industries. Construction, on the other hand, hasn’t seen that market rush, probably because of the recent good times. However, with continued business and economic pressures, construction companies will look at all opportunities – in particular consolidations.

Consolidations change everything. However, bringing two struggling companies together doesn’t make one good company. I’m sure many strategic planners have already begun to think about this topic. Time will only tell if my hunch is true.

Schneider Downs provides accounting, tax, wealth management and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA, and Columbus, OH.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Construction BY Todd Lucas
Schneider Downs & Co., Inc.’s Construction Practice Nationally Ranked
Data: The 21st Century Building Material
Revenue Recognition Standard finally effective for nonpublic companies. Are you ready or still in denial?
Good News Regarding Excess Business Losses For Your Pass-Through Construction Business
The Future of Construction
Higher Education and Construction; Does Building Green Still Matter?

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102