The latest Construction Confidence Index shows construction industry leaders were more optimistic in November 2019 regarding the nonresidential construction sector’s future, according to www.abc.org.
All three components were well above the diffusion index threshold of 50; staffing expectations reached the highest level since April 2019, and sales and profit margin expectations reached their highest levels since May 2019. Seventy-five percent of respondents expect sales to expand during the next six months. Additionally, nearly 65% of contractors expect staffing levels to expand, and more than 50% expect profit margins to expand.
In November 2019, the CCI increased from 63.8 to 69.5 for sales expectations; 58.8 to 61.3 for profit margin expectations; and 63.6 to 66.9 for staffing levels.
“The U.S. economy retains significant momentum entering 2020,” says ABC Chief Economist Anirban Basu. “Accordingly, the nonresidential construction outlook remains stable. The duration of the economic expansion—already record-shattering—has more room to run. ABC’s Construction Backlog Indicator remained virtually unchanged at 8.8 months in November, and with job growth still apparent, demand for office and other forms of commercial construction will persist. Improved state and local government finances working in conjunction with ultra-low interest rates are helping to fuel additional spending in a variety of infrastructure-related categories, including water systems, flood control and public safety.
Though there will always be reasons for concern, including those related to geopolitics,” Basu continues, “the achievement of a first phase trade deal with China and the new United States-Mexico-Canada trade agreement, which replaced NAFTA, should provide much-needed certainty regarding near-term economic prospects.”
