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
Industry Research | Apr 8, 2019
New research finds benefits to hiring architectural services based on qualifications
Government agencies gain by evaluating beyond price, according to a new Dodge survey of government officials.
Office Buildings | Jul 17, 2018
Transwestern report: Office buildings near transit earn 65% higher lease rates
Analysis of 15 major metros shows the average rent in central business districts was $43.48/sf for transit-accessible buildings versus $26.01/sf for car-dependent buildings.
Market Data | May 29, 2018
America’s fastest-growing cities: San Antonio, Phoenix lead population growth
San Antonio added 24,208 people between July 2016 and July 2017, according to U.S. Census Bureau data.
Industry Research | Jan 30, 2018
AIA’s Kermit Baker: Five signs of an impending upturn in construction spending
Tax reform implications and rebuilding from natural disasters are among the reasons AIA’s Chief Economist is optimistic for 2018 and 2019.
Market Data | Jan 30, 2018
AIA Consensus Forecast: 4.0% growth for nonresidential construction spending in 2018
The commercial office and retail sectors will lead the way in 2018, with a strong bounce back for education and healthcare.
Market Data | Jan 29, 2018
Year-end data show economy expanded in 2017; Fixed investment surged in fourth quarter
The economy expanded at an annual rate of 2.6% during the fourth quarter of 2017.
Market Data | Jan 25, 2018
Renters are the majority in 42 U.S. cities
Over the past 10 years, the number of renters has increased by 23 million.
Market Data | Jan 12, 2018
Construction input prices inch down in December, Up YOY despite low inflation
Energy prices have been more volatile lately.
Market Data | Jan 4, 2018
Nonresidential construction spending ticks higher in November, down year-over-year
Despite the month-over-month expansion, nonresidential spending fell 1.3 percent from November 2016.
Market Data | Dec 14, 2017
ABC chief economist predicts stable 2018 construction economy
There are risks to the 2018 outlook as a number of potential cost increases could come into play.