Associated Builders and Contractors' (ABC) Construction Confidence Index (CCI) showed a slight dip in the second half of 2015, although all three components of the index showed optimism for continued economic growth. The diffusion index measures forward-looking construction industry expectations in sales, profit margins and staffing levels, with readings above 50 indicating growth.
"An abundance of considerations have rendered the typical nonresidential construction executive somewhat less confident regarding near-term business prospects," said ABC Chief Economist Anirban Basu. "These include jittery financial markets, stubbornly low commodity prices, unpredictable Federal Reserve policy and rising consumer delinquencies and corporate defaults. Outside of financial concerns, the industry is concerned by skilled construction worker shortages, the unpredictable presidential election cycle and expanding geopolitical risk. Still, construction executives collectively expect nonresidential construction's impressive recovery to persist, in large measure because backlog remains high.
"Still, construction executives are well aware that the business cycle can end abruptly," warned Basu. "Asset prices continue to be unsettled and credit availability could tighten going forward if markets remain wobbly. The direction of interest rates is naturally of enormous concern to construction leaders since real estate and construction are among the sectors most sensitive to shifts in the cost of capital and the availability of financing."
Here is a snapshot of the results for the most recent survey administration:
- Sales expectations fell from 69.4 to 67.0;
- Profit margin expectations edged lower from 62.9 to 62.8;
- Staffing level intentions dipped from 66.2 to 63.9.
Related Stories
Apartments | Jun 4, 2024
Apartment sizes on the rise after decade-long shrinking trend
The average size of new apartments in the U.S. saw substantial growth in 2023, bouncing back to 916 sf after a steep decline the previous year. That is according to a recent RentCafe market insight report released this month.
HVAC | May 28, 2024
Department of Energy unveils resources for deploying heat pumps in commercial buildings
To accelerate adoption of heat pump technology in commercial buildings, the U.S. Department of Energy is offering resources and guidance for stakeholders. DOE aims to help commercial building owners and operators reduce greenhouse gas emissions and operating costs by increasing the adoption of existing and emerging heat pump technologies.
Student Housing | May 28, 2024
Student housing remains strong in May 2024
Although the pace has slowed down this year, student housing preleasing for the 2024–2025 season reached 73.5% in April, 50 basis points year-over-year (YOY).
Mixed-Use | May 22, 2024
Multifamily properties above ground-floor grocers continue to see positive rental premiums
Optimizing land usage is becoming an even bigger priority for developers. In some city centers, many large grocery stores sprawl across valuable land.
Office Buildings | May 20, 2024
10 spaces that are no longer optional to create a great workplace
Amenities are no longer optional. The new role of the office is not only a place to get work done, but to provide a mix of work experiences for employees.
Contractors | May 15, 2024
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of April 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator increased to 8.4 months in April, according to an ABC member survey conducted April 22 to May 6. The reading is down 0.5 months from April 2023, but expanded 0.2 months from the prior month.
MFPRO+ News | May 13, 2024
Special multifamily report indicates ‘two supply scenarios’
Could we be headed towards a “period of stagflation?” That's the question Andrew Semmes, Senior Research Analyst, poses in the Matrix May 2024 Multifamily Rent Forecast update.
Adaptive Reuse | May 9, 2024
Hotels now account for over one-third of adaptive reuse projects
For the first time ever, hotel to apartment conversion projects have overtaken office-to-residential conversions.
MFPRO+ News | May 8, 2024
Multifamily rent growth approaches peak levels in April 2024
In its latest multifamily report, Yardi Matrix finds that the national average rent has increased for the second month in a row.
MFPRO+ Special Reports | May 6, 2024
Top 10 trends in affordable housing
Among affordable housing developers today, there’s one commonality tying projects together: uncertainty. AEC firms share their latest insights and philosophies on the future of affordable housing in BD+C's 2023 Multifamily Annual Report.