[VIDEO] How to Analyze Contract Value Trends
What does the Viewpoint Contract Value Trends Index Measure?
One of the most valuable charts you'll find on CEREBRA, Constructible's free, comprehensive market data aggregator, is the Viewpoint Contract Value Trends Index.
This data is aggregated and anonymized monthly from over 1,000 contractors using Viewpoint's construction management suite. It reflects the financial health of the construction industry and often reveals trends 2 to 3 months ahead of other indexes published in the industry.
Separated into general contractor, heavy highway, and specialty subcontractor, these values represent the total dollar value of contracts and not the number of contracts.
How can you use market contract value trends in your planning and business reviews?
The Viewpoint Contract Values Index is important from a revenue and margin perspective because it's a percentage of dollars that represents overall industry contract values.
It is insightful to monitor how much revenue is in ERP systems like Viewpoint because contracts can be thought of as a percentage of revenue and you can start to see that trend over time. You have a benchmark to compare last year to this year -- are the number of contract dollars growing or shrinking?
Now, look at your own contract values -- are you on track with the industry? Is the percentage of your growth different than the industry?
Another way to analyze contract value trends
Another perspective to look at contract value trends is to look at seasonality. There's dips and spikes within the industry and you can see that during certain months. For example, an uptick does typically happen in the summer time. Keep that in mind as you're looking at this chart for future planning.