flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

Contractor confidence ends 2016 down but still in positive territory

Market Data

Contractor confidence ends 2016 down but still in positive territory

Although all three diffusion indices in the survey fell by more than five points they remain well above the threshold of 50, which signals that construction activity will continue to be one of the few significant drivers of economic growth.


By ABC | March 29, 2017

Expectations for 2017 have become less optimistic, but the majority of industrial and commercial construction contractors still expect growth this year, according to the latest Associated Builders and Contractors (ABC) Construction Confidence Index (CCI). Although all three diffusion indices in the survey — profit margins, sales and staffing levels—fell by more than five points, they remain well above the threshold of 50, which signals that construction activity will continue to be one of the few significant drivers of economic growth.

The latest survey revealed that:

  • The CCI for sales expectations fell from 65.1 to 59.7;
  • The CCI for profit margin expectations fell from 61.1 to 56;
  • The CCI for staffing levels fell from 64.9 to 59.5.

 

 

“There may be a period during which the pro-business agenda being forwarded in Washington, D.C., will significantly impact construction firm expectations,” says ABC Chief Economist Anirban Basu in a release. “In fact, many construction executives have become more confident, including those who would stand to benefit most directly from an infrastructure package. However, there is a realization among construction firms that, if implemented, many of these pro-business initiatives would begin impacting the economy beyond the six-month timeframe built into ABC’s construction confidence survey.

“Despite an ongoing dearth of public construction spending growth, certain construction segments have experienced significant expansion over time, including office, hotel, healthcare and multifamily segments,” says Basu. “This helps explain why more than 60% of respondents expect their sales to rise during early 2017 and the same number expect staffing levels to rise.

“Respondents from Florida and other rapidly growing states are reporting significant shortages of appropriately skilled workers, which is helping to drive compensation costs higher,” says Basu. “This helps explain why fewer than half (48%) of respondents now expect profit margins to climb. That is down from 54% from the previous CCI, supporting the proposition that the construction skills shortfall has worsened over the past six months.

“For now, confidence appears to be supported less by policymaking than by the ongoing momentum of the U.S. construction industry,” says Basu. “Going forward, confidence is likely to depend more intensely on the new administration’s capacity to move its pro-business agenda from theory to practice.”

The following chart reflects the distribution of responses to ABC’s most recent surveys.

 

Related Stories

Market Data | Nov 6, 2018

Unflagging national office market enjoys economic tailwinds

Stable vacancy helped push asking rents 4% higher in third quarter.

Market Data | Nov 2, 2018

Nonresidential spending retains momentum in September, up 8.9% year over year

Total nonresidential spending stood at $767.1 billion on a seasonally adjusted, annualized rate in September.

Market Data | Oct 30, 2018

Construction projects planned and ongoing by world’s megacities valued at $4.2trn

The report states that Dubai tops the list with total project values amounting to US$374.2bn.

Market Data | Oct 26, 2018

Nonresidential fixed investment returns to earth in Q3

Despite the broader economic growth, fixed investment inched 0.3% lower in the third quarter.

Market Data | Oct 24, 2018

Architecture firm billings slow but remain positive in September

Billings growth slows but is stable across sectors.

Market Data | Oct 19, 2018

New York’s five-year construction spending boom could be slowing over the next two years

Nonresidential building could still add more than 90 million sf through 2020.

Market Data | Oct 8, 2018

Global construction set to rise to US$12.9 trillion by 2022, driven by Asia Pacific, Africa and the Middle East

The pace of global construction growth is set to improve slightly to 3.7% between 2019 and 2020.

Market Data | Sep 25, 2018

Contractors remain upbeat in Q2, according to ABC’s latest Construction Confidence Index

More than three in four construction firms expect that sales will continue to rise over the next six months, while three in five expect higher profit margins.

Market Data | Sep 24, 2018

Hotel construction pipeline reaches record highs

There are 5,988 projects/1,133,017 rooms currently under construction worldwide.

Market Data | Sep 21, 2018

JLL fit out report portrays a hot but tenant-favorable office market

This year’s analysis draws from 2,800 projects.

boombox1
boombox2
native1

More In Category




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021