flexiblefullpage -
billboard - default
interstitial1 - interstitial
catfish1 - bottom
Currently Reading

Construction contractors remain confident as summer begins

Market Data

Construction contractors remain confident as summer begins

Contractors were slightly less upbeat regarding profit margins and staffing levels compared to April.


By ABC | July 18, 2019

U.S. construction industry leaders remained upbeat regarding nonresidential construction’s near-term prospects in May 2019, according to the Construction Confidence Index released today by Associated Builders and Contractors.

While contractors were slightly less upbeat regarding profit margins and staffing levels compared to April, all three principal components measured by the survey—sales, profit margins and staffing levels—remain well above the diffusion index threshold of 50 in May. Nearly 73% of contractors expect sales to rise during the next six months and 68% expect staffing levels to increase further.

  • The CCI for sales expectations increased from 68.4 to 70.0 in May.
  • The CCI for profit margin expectations fell slightly from 63.0 to 62.8.
  • The CCI for staffing levels fell from 67.4 to 66.8.

“While there continues to be considerable chatter regarding a slowing economy, the need for federal rate cuts and the damaging effects of ongoing trade disputes involving the United States, China, the European Union and India, among others, nonresidential firm leaders continue to expect further construction spending growth,” said ABC Chief Economist Anirban Basu. “Recent data regarding job growth and consumer spending indicate that any economic slowing to date has been mild and that the expansion is set to endure for the next few quarters.

“While profit margin expectations and staffing levels measures declined slightly in May, they remained well above the threshold level of 50,” said Basu. “More importantly, these CCI measures likely declined due to economic strength rather than weakness. Firms continue to scramble for talent in the context of an economy offering more job openings than jobseekers. As a result, staffing levels cannot rise rapidly even in the context of elevated demand for workers, and profit margins are negatively impacted by the accompanying rapid rise in compensation costs. However, far more industry leaders expect profit margins to rise than decline.

“As we reach the longest economic expansion in American history, recent construction spending data indicate that much of the momentum is coming from public projects,” said Basu. “Years of growth have helped to stabilize state and local government finances, resulting in more money available to fund transportation, water, public safety and other projects. While spending in certain private segments has been expanding less rapidly of late, this nascent weakness has been more than fully countervailed by the strength of investment in infrastructure.”

CCI is a diffusion index. Readings above 50 indicate growth, while readings below 50 are unfavorable. 

 

 

 

Related Stories

Market Data | Jan 18, 2017

Architecture Billings Index ends year on positive note

Architecture firms close 2016 with the strongest performance of the year.

Market Data | Jan 12, 2017

73% of construction firms plan to expand their payrolls in 2017

However, many firms remain worried about the availability of qualified workers.

Market Data | Jan 9, 2017

Trump market impact prompts surge in optimism for U.S. engineering firm leaders

The boost in firm leader optimism extends across almost the entire engineering marketplace.

Market Data | Jan 5, 2017

Nonresidential spending thrives in strong November spending report

Many construction firms have reported that they remain busy but have become concerned that work could dry up in certain markets in 2017 or 2018, says Anirban Basu, ABC Chief Economist.

Market Data | Dec 21, 2016

Architecture Billings Index up slightly in November

New design contracts also return to positive levels, signifying future growth in construction activity. 

Market Data | Dec 21, 2016

Will housing adjust to an aging population?

New Joint Center report projects 66% increase in senior heads of households by 2035.

Market Data | Dec 13, 2016

ABC predicts modest growth for 2017 nonresidential construction sector; warns of vulnerability for contractor

“The U.S. economy continues to expand amid a weak global economy and, despite risks to the construction industry, nonresidential spending should expand 3.5 percent in 2017,” says ABC Chief Economist Anirban Basu.

Market Data | Dec 2, 2016

Nonresidential construction spending gains momentum

Nonresidential spending is now 2.6 percent higher than at the same time one year ago.

Market Data | Nov 30, 2016

Marcum Commercial Construction Index reports industry outlook has shifted; more change expected

Overall nonresidential construction spending in September totaled $690.5 billion, down a slight 0.7 percent from a year earlier.

Industry Research | Nov 30, 2016

Multifamily millennials: Here is what millennial renters want in 2017

It’s all about technology and convenience when it comes to the things millennial renters value most in a multifamily facility.

boombox1 - default
boombox2 -
native1 -

More In Category



AEC Tech

Lack of organizational readiness is biggest hurdle to artificial intelligence adoption

Managers of companies in the industrial sector, including construction, have bought the hype of artificial intelligence (AI) as a transformative technology, but their organizations are not ready to realize its promise, according to research from IFS, a global cloud enterprise software company. An IFS survey of 1,700 senior decision-makers found that 84% of executives anticipate massive organizational benefits from AI. 


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