Contractor Confidence Declines, But Optimism Reigns for 2019

Industry News / Market Forecast

February 25, 2019

Contractor Confidence Declines, But Optimism Reigns for 2019

Market expectations among the nation’s contractors slipped in the last three months of 2018, but they remain upbeat about 2019, according to the latest Construction Confidence Index (CCI) from the Associated Builders and Contractors (ABC).

In the fourth quarter CCI:

• Sales expectations declined from 68.6 to 67.2.
• Profit margin expectations fell from 63.6 to 60.6.
• Staffing levels decreased from 68.6 to 66.2.

CCI is a diffusion index. Readings above 50 indicate growth, while readings below 50 are unfavorable. A score above 60 suggests significant optimism.

“Despite rising materials costs, an ongoing skills shortage and higher borrowing costs, CCI continues to indicate optimism in America’s construction sector,” said ABC Chief Economist Anirban Basu. “Construction industry leaders expect profit margins will hold up well during the first half of 2019 despite these rising costs, which speaks to the ongoing strong demand for construction services.”

These results track closely to ACEC Engineering Business Index (EBI), which fell by 7.8 in the fourth quarter, with engineering firm leaders expressing concern over profit margins and backlogs. To read the latest EBI report, click here.

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