Construction industry leaders’ confidence fell in September after increasing in August, according to www.abc.org.
Two components decreased in September and one component was unchanged. Two of the three components were above the diffusion index threshold of 50. Contractors expect their profit margins to shrink during the next six months.
In September, the Associated Builders and Contractors’ Construction Confidence Index decreased from 53 to 51.3 for sales expectations; 47.8 to 44 for profit margin expectations; and remained at 54.4 for staffing levels.
“While nonresidential construction industry sales are anticipated to be roughly flat over the next six months, more than a third of contractors expect their sales to decline, a dramatic increase from the less than 17% recorded at the same time last year,” said ABC Chief Economist Anirban Basu. “In addition, more than three-fourths of contractors expect profit margins to be flat or worse over the next six months. This is consistent with fewer bidding opportunities, more vigorous competition for work, rising materials costs, tighter lending standards, weakened commercial real estate fundamentals, diminished state and local government financial health, and persistent difficulty in identifying and hiring sufficiently skilled and motivated workers. Despite ongoing economic uncertainty as the pandemic lingers and winter approaches, staffing levels are expected to grow over the next six months as contractors strive to hold onto their workforce and potentially add to their pool of talent.”