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Executive Summary Statistics from the second quarter (April 1 through June 30) of 2023 followed a similar path of the past nine quarters, which all saw declines in project starts and contract values. Additionally, this past quarter also saw flat hiring rates and an increase in cash flow, indicating that contractors are holding onto cash. Put together, it could indicate that contractors are even less confident in the current business environment than they have been previously. This lack of confidence in Q2 2023 starts from the number of new projects in the pipeline, which declined 35% across all verticals as compared to the second quarter of 2022. This was most pronounced with heavy highway and civil contractors, who saw a 60% decline in new projects, followed by general contractors (44% decline), and speciality contractors (20% decline). Contract values followed a similar trajectory, decreasing 48% across the industry. Once again, heavy highway and civil contractors saw the largest decline (60%), followed by specialty contractors (45%) and general contractors (20%). Unlike previous quarters, which saw modest gains in hiring—last quarter hiring was relatively flat, with small decreases across all three verticals and most regions. However, this isn't too surprising given the decreases seen in new projects and contract values; there may not be enough work to warrant hiring more people. In a similar vein, most verticals continue to hold onto cash, which demonstrates that they're not confident in the current business environment, particularly general contractors. However, a decrease in cash flow for heavy highway and civil contractors was surprising, perhaps indicating that some of them are finally starting to receive more money from the Infrastructure Investment and Jobs Act to spend on large infrastructure projects. New to the Q2 2023 Quarterly Construction Metrics Index is copper pricing. Copper is widely used across the mechanical, electrical, and plumbing industries and is a good bellwether for the cost for many products—particularly wire in the electrical industry, and copper pipe and fittings in plumbing. The consistency of copper pricing can be a good measure for the predictability of materials costs for a construction project based on the time of purchase. More insights can be found in the Q2 2023 Quarterly Construction Metric Index, which represents data from the second quarter of 2023, compared to the prior year. 6 Construction Activity Index - Q2 2023 ©Trimble Viewpoint, Inc. All Rights Reserved.

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