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Contractors Confident Thanks to Profit Margins, Staffing Levels

Expectations for profit margins and staffing kept contractors confident in August when results exceeded July predictions. According to Associated Builders and Contractors (ABC), the Construction Confidence Index (CCI) shows an increase in both factors, while sales expectations declined.

More than half of the surveyed contractors anticipate an increase in profit margins over the next six months, with even more expecting higher staffing levels. However, contractors weren't as hopeful about sales.

"There is evidence of growing weakness in certain parts of the nation with respect to commercial activity," ABC chief economist Anirban Basu said in the report. "The Architecture Billings Index and other economic indicators suggest some slowing in commercial construction, in part because of growing concerns regarding saturation in certain markets like office and lodging. The recent softening of industrial activity also helps explain why contractors were not quite as confident about sales expectations in August compared to July."

Despite the less favorable findings, Basu noted U.S. nonresidential contractors are staying positive.

—Andrew Michaels, editorial associate

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Friday, 23 October 2020