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Construction leaders’ confidence dipped in June

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Print this page By Richard Foster | .(JavaScript must be enabled to view this email address)

In June, the U.S. construction industry expressed a small drop in confidence about near-term prospects for nonresidential construction but contractors remain reasonably upbeat, according to the results of the most recent Construction Confidence Indiex survey released by the Associated Builders and Contractors.

Contractors were slightly less optimistic about sales expectations, profit margins and staffing levels than in the prior month, according to a statement from the national construction industry trade association, which represents 21,000 members in 69 chapters nationwide.

Overall, 67% of contractors survyed in the June report said they expect sales to rise in the next six months, while 59% predict staffing increases and 54% expect profit margins to grow. Responses above 50% in the index indicate industry growth.

Although "economists near and far are searching for signs of the next economic downturn," the contractors' outlook shows that nonresidential construction is still positioned as a driver for economic growth, ABC Chief Economist Anirban Basu said in a press release.

"What is perhaps most impressive is the expectation that profit margins will continue to rise," Basu said. "This is an indication that contractors continue to enjoy pricing power, helping to offset the impacts of rising wage pressures. Even with wages rising, more contractors expect to add people than to subtract them, another reason to believe that, for now, the U.S. expansion remains firmly in place. This is further supported by indications that sales of nonresidential construction services continue to expand."


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