Associated Builders and Contractors Inc.

Construction Confidence Declines in Second Half of 2012

Associated Builders and Contractors (ABC) today released its Construction Confidence Index (CCI) for the second half of 2012. The CCI reflects three aspects of the U.S. nonresidential construction industry: sales prospects, staffing levels and profit margins.

“Last year, the biggest issue was the fiscal cliff,” said ABC Chief Economist Anirban Basu. “This year, worries likely will stem from a combination of unresolved fiscal cliff issues and another potentially intense debt ceiling debate.

“A strong construction market requires capital, confidence and conditions consistent with demand for construction,” Basu said. “While capital and conditions have been improving steadily in conjunction with the broader economy, confidence continues to lag.

“The ongoing lack of confidence, including among those who would otherwise purchase construction services, continues to produce small and halting gains in nonresidential construction spending,” said Basu. “Though index values for sales, profit margins and staffing levels remained above 50 during the second half of 2012 - indicating industry growth - confidence was lower overall.”

  • Sales expectations fell from 66.3 to 62.3
  • Profit margins dropped from 56.3 to 55.9
  • Staffing levels declined from 62.2 to 59.6

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