Construction Confidence Down for Second Half of 2012

Confidence in the U.S. construction market was down for the second half of 2012, according to the latest report from the Associated Builders and Contractors (ABC). ABC’s Construction Confidence Index (CCI) looks at 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,” says 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 adds. “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. 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.”

According to the report, the CCI for sales expectations fell from 66.3 to 62.3; profit margins dropped from 56.3 to 55.9; and staffing levels declined from 62.2 to 59.6.

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