Commercial Construction Index Forecasts Healthy 2017
Contractors in the U.S. commercial construction industry are optimistic about the current state and forward-looking health of the sector, noting a healthy balance of project backlog and projected growth, which indicates overall strength and confidence in the market. Results from the three leading indicators used to compute the USG + U.S. Chamber of Commerce Commercial Construction Index (CCI)—backlog levels, new business opportunities and revenue forecasts—yield an index number of 76, reflecting healthy contractor sentiment.
In Q2 2017, overall backlog levels indicate a healthy amount of booked work, with the majority (82%) of contractors noting stable or increased backlogs, bringing most contractors closer to their average stated ideal level of backlog of 12 months. With respect to new business and revenue forecasts, the results provide an optimistic perspective, with nearly all (98%) contractors reporting high or moderate confidence in the demand for commercial construction and nearly all (96%) contractors expecting revenues to grow or remain stable this year over last year.
Despite strong confidence in the industry, contractors continue to face challenges, including the expected need to hire workers balanced with difficulty finding the right talent to fill those positions. While two-thirds (66%) of contractors indicate an expectation to employ more workers in the next six months, 61% of contractors report high degrees of difficulty finding skilled workers. The survey found differences in geographic hiring needs, with over three-quarters of contractors in the Midwest and West regions expecting to hire more people in the next six months. In the Southeast, over 65% of the firms reported difficulties finding people.
Contractors also reported a high percentage of green building experience, with most respondents (79%) working on at least some green or sustainable projects, although these projects represent approximately one-third of their total workload. The CCI will continue to track these trends among other key factors that are impacting the health of the market in the coming quarters.
