Dive Brief:
- The Associated Builders and Contractors' Construction Confidence Index (CCI) for the first half of 2015 found that contractor confidence saw steady growth, with sales expectations rising from 67.3 to 69.4 and profit margin expectations up from 61.0 to 62.9.
- Staffing level intentions on the CCI decreased from 66.3 to 66.2 due, in part, according to the ABC, to the lack of available skilled labor. However, the profit margin expectation number is nearing the highest reading in three years, and the sales expectation number reflected that three out of four respondents anticipate an increase in sales.
- The CCI measures forward-looking construction industry expectations in sales, profit margins and staffing levels, and readings above 50 indicate growth.
Dive Insight:
ABC Chief Economist Anirban Basu said that although the U.S. is still in the midst of a recovery, the global economy is slowing, and there is uncertainty in financial markets.
Nonresidential construction spending, he said, is an important player in the U.S. economic expansion. Spending on factories, hotels, office buildings, and distribution centers is climbing, helped along by more available financing, low retail and office vacancies, and rising hotel occupancy rates.
"Though the U.S. economy refuses to boom, the pace of growth has been enough to allow the average contractor to secure more work at higher margins," Basu said.
Overall, Basu said, the average construction decision maker is more confident, but business investment growth is "mediocre by historic standards," so the ABC expects continued U.S. economic growth of a modest 2-2.5%.