It is widely believed that major residential construction now has slowed down in many areas of the country due to spiked costs of materials (eg, plywood). But, according to a June 2 Reuters report, the Commerce Department showed that the seasonally adjusted annual rate of the value of all construction in April did rise – albeit only 0.2% following a 1.0% growth in March. Further, actual construction spending, an economic line item that typically accounts for about 4% of gross domestic product, is up 5.8% year to date.
According to the new, inaugural 2021 National Subcontractor Market Report (www.bild.com), the following data points show a rather spirited industry but also reveals key challenges they are dealing with:
Challenges revealed by the report include:
- Contractors are undercapitalized and working with lackluster credit & financing options.
- 44% of contractors believe they can depend on cash flow to grow their business.
- 46% of contractors struggle with cash flow thanks in large part to long industry payment cycles. This reveals a contradiction in their approach to financing growth.
It is important to realize the challenges, as distributors, so you can tailor your presentation for optimal persuasion. After all – these contractors need to market themselves, to distinguish themselves from quite a hefty assortment of competitors.
However, despite those challenges the market research also paints a picture of significant optimism. For example:
- 62% of contractors said they are in shape to seek larger projects this year.
- 74% of contractors remain eager to grow their business despite the increasing economic challenges, eg materials, and gas price hikes. According to the report, “A resounding entrepreneurial spirit is clear.”
When most people envision “construction,” they immediately think of carpentry trade but it is a much more widely encompassing arena. It includes but is not limited to: plumbers, sheet metal workers, welders, glaziers, fencers, masons, linemen, pipefitters, plasterers, carpet and flooring, HVAC, roofers, and more. Branching out, there are engineers and architects.
Most construction companies do not deal with the public as their clientele, but as contractors and subcontractors to builders. This is a lucrative market that can become a specialty. And if you win over a builder, you have an easy in to win over the various construction specialties.
Presenting items their employees and the employees’ families can use is a wise idea that will likely turn the light to green. A first, of course, would be outfitting – fleece, Ts, caps as well as hard hats and safety vests. ERB offers a wide array of safety gear for construction crews/employees, such as flame-resistant wear, head protection, safety glasses/goggles, gloves, hearing protection, cooling products, face shields, and more. (June is Workplace Safety Month, which is highly relevant for any construction company – whether it’s earthmoving, paving, roofing, carpentry, masonry and more.)
Items that enhance the job that construction employees would appreciate include heavy-duty work gloves (Garrett Specialties #1289-104739), a construction worker combo of gloves and socks (Suntex Industries, #CWC-50), carpenter pencils (Garrett Specialties, #1092-3021130), T-squares (Alumicolor, #2133), flashlights and tape measures (Bay State Specialty Company, ##R425, # R496, #R495, #R493 and #R475). These are but a few examples.
Construction employees would also appreciate and use vacuum bottles, can coolers, and food/beverage coolers? First aid kits, hand sanitizers, sunblocks, and lip balms.
When a potential client construction company is referred to a customer successfully, a thank-you referral gift also makes sense. Since these contracts are usually pretty large, a more expensive gift would be appropriate.
Giveaways for kids can include a construction teddy bear (Artistic Toys & Promotions, LLC, #S2157), construction worker rubber duck (Prime Line, #RD171; PMGOA, #AC-YK8E8) and the Building & Construction coloring book (Fields Manufacturing, #CB1041). Other items perfect for tradeshows and other events include hardhat keychain (Garrett Specialties, #1280-306129), novelty hard hats (Global Promos Service, #DVZ222, The Beistle Company, #66788PPC), and more.
Building relationships with construction companies can be lucrative, creative, and longstanding.