Post Time:Jul 06,2021Classify:Industry NewsView:1255
Signs continue to point in positive directions for the construction industry as the impacts of COVID-19 start to lessen. Data from the 2021 second-quarter U.S. Chamber of Commerce Commercial Construction Index (CCI) shows increasing contractor optimism in all three indicators used to gauge contractor confidence. This quarter saw a three-point rise compared to the first and a six-point increase in this quarter’s overall index score to 65 from 59 in Q4 2020. However, despite the gains, the CCI remains nine points below its score of 74 from Q1 2020 before the pandemic.
All three key drivers behind the score—revenue, new business confidence and backlog—improved this quarter. These three indicators are used to gauge confidence in the commercial construction industry, generating a composite index on the scale of 0 to 100 that serves as an indicator of health of the contractor segment on a quarterly basis. The research in the report was developed with Dodge Data & Analytics by surveying commercial and institutional contractors.
Revenue
Over the next 12 months, contractors’ revenue expectations increased to 61 (up four points from Q1 2021). In the first quarter of this year, 39% of contractors expect their revenue to increase over the next year, a jump from 36% last quarter. Six percent expect a decrease in revenue this quarter, down seven points from Q1 2021, and down 15 points year-over-year from 21% expecting revenue declines in Q2 2020. The majority (55%) expect their revenues to remain about the same in the next 12 months.
New Business Confidence
The overall level of contractor confidence increased to 62 (up three points from Q1 2021). Most (89%) contractors also report a moderate to high level of confidence that the U.S. market will provide enough new business in the next year. Thirty-four percent report a high level of confidence, up 10 percentage points from Q1 2021.
Backlog
The backlog indicator remained steady from Q4 2020 at 69. According to the report, this key driver is the closest of the three to pre-pandemic norms: its score was 76 in pre-pandemic Q1 2020. The average months of actual backlog increased from eight months in Q1 2021 to 9.2 months this quarter. The optimal average backlog level increased 12.8 months from 11.6 months in Q1 2021.
Skilled Worker Shortage
While the CCI does show positive signs of recovery, there are still some workforce challenges. This quarter, 88% of contractors report moderate to high levels of difficulty finding skilled workers, up from 85% in Q1 2021. Those reporting high difficulty remain consistent from last quarter at 45% and are statistically unchanged year-over-year.
Meanwhile, 87% report a moderate to high degree of concern about their workers’ adequate skill levels. However, fewer contractors report a high degree of concern this quarter, with 38% reporting a high degree of concern, down from 46% in Q1 2021.
Hiring plans are once again positive as about half (52%) of contractors say they will employ more people in the next six months, up from 46% in Q1 2021. Slightly less than half (43%) expect to keep the same number of workers on staff and just 3% expect to reduce their staffing. Of the few who expressed they will reduce staff, the majority (67%) say it will be a small decrease.
Source: usgnn.comAuthor: shangyi
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