Confidence in the growth of nonresidential construction rose in the first half of 2014, according to a recent report from a national builders and contractors group.
The Associated Builders and Contractors (ABC) Construction Confidence Index increased across three measured categories – revenues, profit margins and hiring, according to a news release.
“Each index now stands at a post-recession high, implying that nonresidential construction's recovery, already robust, is positioned to continue into the year ahead,” said the report released earlier this month.
During the first six months of 2014, with readings above 50 indicating growth, sales expectations rose from 63.2 to 68.2; profit margin expectations expanded from 57.5 to 60.3; and staffing level intentions moved higher from 62.2 to 65, indicating an acceleration in hiring going forward, according to the news release.
"A number of factors are aligning to boost the performance of the nonresidential construction industry and the confidence of construction business owners," said ABC chief economist Anirban Basu in the release. "August notwithstanding, employment growth has been solid, including in segments such as professional/business services and leisure/hospitality, which in turn is helping to trigger new construction in office and lodging segments. The industry's confidence has also been boosted by low interest rates, easing credit conditions for developers, expanded consumer spending and stabilizing state and local government revenues, which in many cases is attributable to a combination of higher retail sales and property tax revenue.”
Greg Uhl, owner of general contractor Uhl Inc., said the report’s information seems to coincide with local trends.
“For the first half of the year, there was a lot more activity from what I was seeing,” said Uhl, whose company specializes in commercial upfits, renovations, alterations and remodels. The company recently finished converting a Rita’s Ice to a Tropical Smoothie Café at Long Leaf Mall, and is in the midst of relocating the Terex Cranes office.
In the national group’s news release, Basu remained cautious about the future.
"While industry momentum has improved with the weather and the current survey indicates that the pace of progress will continue to accelerate into 2015, do not expect a boom," Basu said in the release. "The bulk of respondents believe that improvement in sales, profit margins and staffing levels will be gradual moving forward. Moreover, while nearly three-quarters of respondents expect sales volume to increase during the months ahead, fewer than half expect an improvement in profit margins, indicating that the marketplace remains unusually competitive from a pricing perspective."
