Carolinas AGC Construction Barometer(TM) Unchanged; Indications of Improving Construction Business Conditions Seen
CHARLOTTE, N.C., Aug. 22 /PRNewswire/ -- The most recent Carolinas AGC Construction Barometer(TM), which tracks quantitative data as well as opinion among contractors and industry allies, remains at 2.97, unchanged from the fourth quarter of 2002. However, a look inside the quarterly numbers indicates that the Carolinas construction industry may have turned the corner. Strengthened contractor expectations for improved business conditions by mid-2003 along with a significant advance in anticipated highway and utility spending in both Carolinas drove a hefty gain in one Barometer component. The quantitative data in the Business and Economic trends moved up sharply in the first quarter 2003 report, posting a 13.3 percent gain from fourth quarter 2002. The general level of unemployment within the Carolinas labor market remained virtually unchanged from fourth quarter 2002 to first quarter 2003, stemming the tide of job losses evident in previous reports. "It's very likely that we've turned the corner on the 2001 - 02 recession in commercial construction, and we're beginning to see better business conditions throughout the nonresidential construction industry," says Tony Plath, UNCC associate professor of finance and developer of the Carolinas AGC Barometer. "It's too early to call the growth trend emerging from the Barometer a genuine turning point, but it is a growth trend and it points to better business conditions in coming quarters." According to Plath, the Barometer points to slow, steady improvement in the construction industry with a much better outlook than it has had at almost any point in the last five or six quarters. He says job losses in other sectors of the economy, combined with contractors' increasing difficulty in finding qualified workers, and a slight deterioration in financing availability are only minor negatives in the overall economic scheme. State-By-State Overview North Carolina's Barometer rose 1.5 percent to 2.96, while South Carolina's Barometer declined to 3.00, down 3.1 percent from fourth quarter 2002. North Carolina's Business and Economic trends series of the quantitative index moved up 22.6 percent, while South Carolina posted a modest 2.7 percent decline in this series. Rising NC Department of Transportation spending is at least partially responsible for the strength of anticipated business improvement in North Carolina. Heartland North Carolina holds the most positive outlook, posting a 30.1 percent increase in the Business and Economic trend segment of the Quantitative Index. Contractors in this region anticipate greatly increased business activity in coming quarters. Recent announcements of public works projects in the region, increased DOT spending and several large private sector projects in the Charlotte area support this upbeat attitude. Eastern and Western NC are both moderately down, 0.2 percent and 3.8 percent respectively. Business expectations are slightly improved in Eastern North Carolina, but this was offset by lower labor availability and expectations of labor cost increases. In Western North Carolina, financing activity fell off 4.6 percent, indicating a decreased willingness to borrow for business expansion. The Barometer in Lowcountry South Carolina tumbled 8.4 percent, pushed lower by weaker anticipated business activity, a softening in the labor market and weaker credit conditions. Upstate South Carolina's Barometer eased down 0.7 percent. Stronger demand for commercial credit and increased DOT spending in the region points toward better days ahead in the Upcountry. As the largest AGC chapter in the US with 3,200 member firms, Carolinas AGC builds its members' businesses through workforce development, business development, profit management, and a self-insured workers' compensation trust. More than 75% of commercial/industrial work (buildings, highways, utility facilities) in the Carolinas is performed or supported by CAGC members.
SOURCE Carolinas AGC
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