Associated Builders and Contractors’ (ABC) Construction Confidence Index (CCI) indicates that contractor confidence will continue to edge higher in the first half of 2015. The diffusion index measures forward-looking construction industry expectations in sales, profit margins and staffing levels with readings above 50 indicating growth.

In summary, first half index readings are as follows:

  • Sales expectations rose from 67.3 to 69.4;
  • Profit margin expectations were up from 61.0 to 62.9; and
  • Staffing level intentions dipped slightly from 66.3 to 66.2.

Most expect that sales will continue to expand and profit margins will widen further, according to the report. ABC’s weighted diffusion index for profit margins is now approaching the highest reading in the index’s three-year history. The sales expectation reading is optimistic with nearly three in four respondents expecting an increase in sales. While the rate of new hires will continue to be brisk, the pace of hiring is not expected to accelerate over the next six months due in large part to a lack of available skilled labor, according to the report.

“The recovery continues and is now in its seventh year, but there is plenty of reason for concern with respect to the U.S. economy,” says ABC chief economist Anirban Basu. “Financial markets have been jittery, the global economy has been slowing, and Federal Reserve policy has become less predictable and more confusing. While U.S. economic expansion continues to be led by growth in consumer outlays, in part due to extraordinarily low interest rates, nonresidential construction spending growth has become an important supporting actor. Nonresidential spending, including on factories, hotels, office buildings and distribution centers, has continued to climb in the face of more readily available financing, lower retail and office vacancy rates and rising hotel occupancy rates.”