New Commercial Construction Index predicts a healthy 2017
- 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.
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.
- U.S. Chamber of Commerce Inaugural ‘Commercial Construction Index’ Indicates High Revenue and Employment Expectations for 2017
- U.S. Chamber of Commerce INTRODUCING THE USG + U.S. CHAMBER COMMERCIAL CONSTRUCTION INDEX
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