Construction industry leaders remained predominantly confident about the nonresidential construction sector's prospects during the final quarter of 2018, according to the latest Construction Confidence Index (CCI) released by ABC.
Sales expectations remained especially upbeat during the fourth quarter, though the proportion of contractors anticipating significant sales increases in the following two quarters dipped by five percentage points. Despite that, more than 67 percent of contractors projected rising sales, while less than 12 percent expected sales to decline.
Just over 50 percent of contractors anticipate their profit margins to grow in the first half of 2019, and only one in 10 contractors expects their profit margins to decline, even with rising labor costs. In addition, more than six in 10 contractors expect to increase staffing levels in upcoming quarters. Despite significant turmoil in the financial markets during last year's final quarter, all three key components measured by the survey -- sales, profit margins and staffing levels -- remain well above the diffusion index threshold of 50, signaling ongoing expansion in construction activity.
More than six in 10 contractors expect to increase staffing levels.
"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.
"While risks remain, this suggests the nation's nonresidential construction segment remains more stable than others."
For more information, visit www. abc.org or call (202) 595-1505.
