ABC: Contractors Remain Upbeat
Commercial and industrial construction contractors entered 2018 with abundant confidence regarding sales and staffing levels for the next six months, according to the latest Construction Confidence Index released by Associated Builders and Contractors. All three components surveyed—sales, profit margins and staffing levels—remained well above 50 in the diffusion index, signaling ongoing progress. But the average contractor is less confident about profit margins than they were a year ago.
“Despite the absence of an infrastructure-led stimulus package, leadership at the typical American construction firm remains upbeat regarding near-term prospects,” said ABC Chief Economist Anirban Basu. “Many firms, including large general contractors, report significant backlog, with office, data center, lodging, fulfillment center and other segments representing key sources of growth. While construction sales are expected to increase, growth in firm profitability is likely to prove more challenging as contractors deal with a combination of rising construction materials prices and worker compensation.
“Among the primary beneficiaries of this strong economic dynamic and upbeat expectations are jobseekers. The construction unemployment rate has trended lower over time, and the most recent CCI survey indicates that the majority of firms expect to bulk up on staffing levels during the near term. Nearly 63 percent of respondents indicate they will expand their staffing during the next few months. By contrast, fewer than 7 percent expect to reduce company employment,” said Basu, “That is remarkable given the on-again, off-again nature of construction work.”