Construction industry leaders’ confidence increased in June as contractors expect growth during the next six months, according to www.abc.org.
All three components rose in June and remained above the diffusion index threshold of 50.
In June, the Associated Builders and Contractors’ Construction Confidence Index increased from 62.9 to 63.5 for staffing levels; 53.2 to 56.3 for profit margin expectations; and 64.2 to 65.7 for sales expectations.
Additionally, ABC’s Construction Backlog Indicator rose to 8.5 months in June.
ABC Chief Economist Anirban Basu said contractors remain optimistic despite recent weakness in employment and spending data.
“The neck-snapping pace of economic recovery, along with low financing costs and the return of projects that had been placed on the back burner during the pandemic, is translating into rising backlog and optimistic perspectives on employment, sales and profit margins,” Basu said.
Basu said the threat of rapidly rising materials prices seems to have become slightly less concerning but remain a factor.
“Materials prices are likely to remain meaningfully above pre-pandemic levels,” Basu said. “Moreover, the shortage of skilled workers continues to worsen, driving up wages and project bids in the process. Demand for construction services is expected to be strong enough during the months ahead to allow contractors to pass many of these higher costs onto the purchasers of construction services, preserving margins in the process.”
