January 8th, 2020
by Tara Lukasik

Leaders of the U.S. construction industry regained a degree of confidence in October 2019 with respect to near-term prospects for sales and profit margins, according to the recently released Associated Builders and Contractors Construction Confidence Index. However, contractors became slightly less confident regarding their staffing levels during the next six months.

Despite large and growing skills shortages and rising compensation costs, nearly 46 percent of contractors expect their profit margins to increase over the next six months. Only 13 percent expect margins to decrease, strongly suggesting that demand for construction services remains elevated and purchasers are willing to offset rising compensation costs, including for subcontractors, which often face the most severe worker challenges.

Approximately 63 percent of contractors expect sales to rise over the next months and 57 percent expect to increase their staffing levels, indicating that the average contractor will face even greater challenges recruiting and retaining talent. The good news is that they are likely to be busy.

  • • The CCI for sales expectations increased from 62.4 to 63.8 in October
  • • The CCI for profit margin expectations increased from 58.5 to 58.8.
  • • The CCI for staffing levels decreased from 64.2 to 63.6.

“The U.S. construction industry will enter 2020 with substantial momentum,” said Associated Builders and Contractors chief economist Anirban Basu. “Contractors continue to position themselves for a growing and more profitable marketplace with expectations of rising sales, wider profit margins and larger teams of workers. However, abundant risks remain, including in the form of increasingly volatile asset prices, a weakening global economy, massive levels of indebtedness in the United States and abroad, political uncertainty emerging from Washington and the impending insolvency of the nation’s Highway Trust Fund. But these risks have been in place for quite some time and, for now, the mood among contractors remains upbeat.”

About the Author
Tara Lukasik
Tara Lukasik is an editor for the International Code Council, working out of its Western Regional Office in Southern California. Starting with the International Conference of Building Officials as the managing editor of its Building Standards Magazine, she has more than 25 years of experience in writing and editing feature content and advancing digital newsletters and magazines from conception to completion. She is currently putting her experience to good use managing the Code Council's Building Safety Journal and its BSJ Weekly newsletter, which connects construction professionals with the Code Council community and the latest industry news and resources. A California native, she enjoys volunteering in her local community and exploring the Golden State with her husband and three spoiled dachshunds. Follow her on Twitter @ICCTLukasik and Linkedin at linkedin.com/in/taralukasik.