Brief

New Commercial Construction Index predicts a healthy 2017

Dive Brief:

  • A new commercial construction economic indicator — which debuted Thursday — predicts healthy revenues and growth for the sector in 2017.
  • The U.S. Chamber of Commerce and USG Corporation developed the quarterly Commercial Construction Index, which is based on contractor surveys, in conjunction with Dodge Data & Analytics. It found that 96% of respondents expect commercial construction revenues to grow or remain stable compared to last year, while 40% said they will increase. Only 3% said they expect revenues to fall this year.
  • The index asks contractors about backlogs, work in the pipeline, income forecasts, workforce concerns and the industry financing environment, and then generates a composite index on a scale of 0-100. In this second-quarter index report, backlog was at 81, new business was at 77 and revenue was at 71.

Dive Insight:  

This new index, which aims to ​identify the most important commercial construction issues for industry leaders, is another indicator in a large list of economic reports — such as those from Dodge Data & Analytics, the American Institute of Architects and ConstructConnect — that seek to gauge the current state and future of the construction industry. A common thread among these reports is the fact that construction demand is expected to remain strong this year, although labor concerns are plaguing most companies.

The USG/U.S. Chamber index found that 66% of contractors anticipate hiring more employees in the next six months, adding to the 6 million already working in the sector. However, 61% of participants said they've had a difficult time finding enough workers, particularly in the concrete, interior finishes/millwork, masonry, electrical and plumbing trades.

This closely aligns with an Associated General Contractors of America survey from earlier this year. The AGC surveyed 1,300 construction companies and found that 73% anticipated increased hiring in 2017, but the same percentage said they were having trouble finding much-needed workers. In addition, 76% of those surveyed said the bleak hiring conditions would remain or even get worse as the year goes on.

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Filed Under: Commercial Building Economy Corporate News
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