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News Dec. 15, 2021

Contractor optimism rose in November

Construction industry leaders’ confidence increased in November, according to

All three components rose for the month and were above the diffusion index threshold of 50.

In November, the Associated Builders and Contractors’ Construction Confidence Index increased from 48.9 to 50.9 for profit margin expectations; 59.2 to 62.5 for staffing levels; and 59.7 to 65.2 for sales expectations.

Additionally, ABC’s Construction Backlog Indicator rose from 8.1 months in October to 8.4 months in November.

“It’s getting better out there,” said ABC Chief Economist Anirban Basu. “While the outlook for construction remains imperfect, extraordinarily low interest rates have created enough appetite for deal-making to push backlog higher and persuade the average contractor that sales, employment and profit margins will climb over the next six months.

“Optimistic expectations are a testament to how strong deal flow remains in stimulus-driven America,” Basu continued. “The infrastructure package passed in November is another reason for optimism, particularly for contractors who work in segments like roads and bridges, water and sewer and mass transit. It is likely that industry circumstances will improve further in 2022, especially if supply chain disruptions and input shortages become less severe, which many economists anticipate by the second half of next year.”


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