National Subcontractor Market Report Shines a Spotlight on Industry Challenges

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Apr 19, 2022, 08:00 ET

Amid soaring material and labor prices, subcontractors remain optimistic in 2022

AUSTIN, Texas, April 19, 2022 /PRNewswire/ -- Billd, the leading provider of material and labor financing solutions for commercial subcontractors, announces today the release of their second annual construction industry market report, the 2022 National Subcontractor Market Report: How Labor Shortages & Market Volatility are Impacting Subcontractors. It surveyed nearly 800 commercial construction professionals across the country, largely consisting of business owners and executives, most of whom have been in business for at least 10 years. The report indicates subcontractors remain concerned about volatile material prices and labor shortages but are optimistic about continued growth over the next year.

Rising material costs and price volatility are key issues for subcontractors. According to the report, 88% of those surveyed expect continued price turbulence to impact their business this year, a 9% jump over 2021 and 87% say the lack of availability of materials will keenly impact their business in 2022. Labor issues, however, are now the most pressing concern of U.S. subcontractors, with 40% reporting availability of skilled construction workers as the biggest risk in 2022, compared to 30% who stated material price volatility as their No. 1 concern. Subcontractors also reported that despite higher material and labor prices, they have not reflected those higher costs in their project bids, putting greater strain on subcontractor profit margins.

"Billd's 2022 National Subcontractor Market Report confirms a lot of the known challenges and opportunities subcontractors experience across the industry," said Chris Doyle, CEO of Billd. "The labor and material challenges for subcontractors is not just a headline, it's the day-to-day reality for every subcontractor in the country."

"Despite these challenges, subcontractors remain optimistic about their businesses. This report highlights the entrepreneurial spirit subcontractors continue to exhibit each and every year, despite an industry that's largely turned its back on them," Doyle says.

The report examines how macroeconomic conditions impacted subcontractors in 2021 and continues to shape their outlook for 2022. It also provides a crucial perspective into subcontractors' opinions of their financing options, cash flow and supplier terms—all of which play a key role in achieving their business goals.

While subcontractors remain satisfied with their financing and credit options, they feel the pressure of paying for large material and labor costs upfront, disrupting their cash flow. According to the data, 59% of contractors intend to rely on cash to fund business growth in 2022, while nearly half state cash flow remains a significant challenge. Supplier terms remain the overwhelmingly preferred option for purchasing materials, with 69% favoring them over credit cards, cash or bank financing. Despite the favorable opinion of supplier terms, 70% of contractors have terms of only 30 days or less; not nearly the length of time needed to ensure payment before having to come out of pocket for materials. According to the survey, two-thirds of subcontractors come out of pocket for materials before getting paid for their work and almost 80% of them wait at least 30 days to receive payment on their pay applications.

"Subcontractors are resilient and optimistic but need more tools to navigate this increasingly challenging environment," said Doyle. "The payments supply chain in construction is terribly broken, leaving subcontractors to finance a $1.5 trillion industry with very few cash flow solutions offered to them. Billd stands as the one company truly championing the subcontractor, helping them get the financial support they need to do the best work of their lives. This report highlights the persistent subcontractor challenges that Billd was created to address; providing subcontractors more financing options to weather rising costs, meet project requirements, and lay the foundation for further growth."

To download the 2022 National Subcontractor Market Report: Financing and Business Growth, click
here

To learn more about Billd's alternative financing options for commercial contractors, visit www.billd.com

About Billd
Billd was started by Christopher Doyle and Jesse Weissburg, industry veterans in both construction and finance. Chris and Jesse were inspired to launch Billd to bring the financial power of Wall Street to the construction job site, allowing subcontractors to bypass project hurdles with access to upfront funds while enabling suppliers to sell more materials with less risk. For subcontractors who usually aren't paid until more than 90 days from purchasing materials, Billd provides 120-day terms so they can stabilize cash flow and more effectively grow their businesses. With a deep understanding of the construction industry, Billd knows traditional credit metrics are poor predictors for risk in this vertical segment and has built a variety of industry-specific proprietary analytic tools to better assess risk in the construction industry.

SOURCE Billd