Construction industry leaders’ confidence rose in February, according to www.abc.org.
Two of the three components rose for the month and all three remained above the diffusion index threshold of 50.
In February, the Associated Builders and Contractors’ Construction Confidence Index increased from 63.9 to 66.3 for staffing levels and from 66.2 to 66.8 for sales expectations. The index decreased from 56.9 to 56.2 for profit margin expectations.
Additionally, ABC’s Construction Backlog Indicator remained unchanged at 8.0 months in February.
“The level of demand for construction services is simply staggering,” said ABC Chief Economist Anirban Basu. “Despite sky-high materials prices, surging compensation costs and attendant impacts on bids, many project owners continue to move forward with projects because they recognize construction costs could rise even further. There is also significant investment capital flowing through the economy in search of yield. Real estate projects often satisfy the need to deploy considerable capital quickly, but only if construction is permitted to move forward.
“Accordingly, despite elevated costs and workforce challenges, construction backlog remains stable,” Basu continued. “Backlog would likely be rising rapidly if costs were more stable. Nonetheless, construction confidence indicators continue to improve. Collectively, contractors expect sales and employment to expand over the next six months. But what is far more remarkable is the expectation that profit margins will expand, indicating that demand for construction services remains elevated enough to countervail cost increases as we head into the heart of 2022.”
