The most recent Associated Builders and Contractors (ABC) Construction Confidence Index (CCI) revealed that contractors are less confident about business prospects for the rest of the year, even as they anticipate recovery in non-residential construction.
Specifically, the index measures forward-looking construction industry expectations in sales, profit margins and staffing levels, with readings above 50 indicating growth.
The salient points in the survey indicate the following year on year movement based on the first six months of the 2016 compared with last year: sales expectations fell from 67.0 to 64.1; profit margin expectations fell from 62.8 to 61.1; and staffing level intentions rose from 63.9 to 64.9.
“The nation continues to add jobs at satisfactory levels, private capital remains abundant, average hourly earnings growth is accelerating, consumer spending is expanding and a federal highway bill was passed late last year. All of these factors suggest that the nonresidential construction spending recovery is poised to continue,” ABC chief economist Anirban Basu explained.
“Still, there is a growing list of worries with which construction executives must contend, and undoubtedly, this has served to diminish confidence across several dimensions. Undoubtedly, some observers will suggest that the 2016 election cycle has served to suppress confidence among construction executives. While some executives may be leery of the election cycle’s impact, construction firm operators are concerned about other geopolitical issues, including record levels of indebtedness worldwide and negative interest rates in much of the advanced world,” he concluded.