Industry Sees Construction Recovery Beginning to Accelerate; Construction Executives Say Market is Growing, But Still Not Robust
NEW YORK, March 21, 2014 /PRNewswire/ -- The construction industry believes that the construction market recovery that picked up pace in 2013 will continue to show meaningful gains, according to a survey in today's issue of Engineering News-Record (ENR) magazine and on http://www.ENR.com, published by McGraw Hill Construction (http://www.construction.com).
"The ENR Construction Industry Confidence Index (CICI) for the first quarter of 2014 shows a dramatic leap in expectations about the current and near term by construction and design firm executives," said Janice L. Tuchman, editor-in-chief of Engineering News-Record. "Survey respondents believe the private-sector markets are the healthiest, led by petroleum, power, hotels & hospitality, and multi-unit residential. All sectors measured by the survey were on the upswing."
The Q1-2014 CICI, which measures industry sentiment for market sectors and trends, is a record 72 on a scale of 100, where a value of 50 indicates a stable market. The higher the value above 50, the wider the belief is in an expanding market. This quarter's figure indicates a belief that the construction market, although still sluggish in some sectors, is making broad gains after the prolonged industry recession. This rating of 72 is higher than the Q4-2013 CICI rating of 69, and significantly higher than the Q4-2012 rating of 50, where as many industry executives believed the market was still declining as there were who believed it was expanding. The index is based on 414 executives responding to surveys sent to more than 3,000 domestic firms on ENR's lists of leading contractors and engineering firms.
As for the current market, only 9% of industry execs polled believe it is still in decline, while 42% believe it is growing. Further, 57% believe the market will be in growth mode within the next six months, while 6% believe is will still be declining. Construction executives firmly believe that there will be a full recovery in 2015, with 64% saying the market will be on the upswing, compared to only 5% of respondents who believe the market will continue to be in decline in 12 to 18 months.
Part of the optimism comes from the view that project financing, particularly in private sector markets, is on the rise. ENR's survey found that while 56.5% of survey respondents said that project financing has been unchanged from six months ago, 33.8% said that credit for project financing was actually easing from the level it was six months ago.
Another bright note is that firms in the construction industry are beginning to feel relief from the pressure on margins caused by the prolonged recession. Of those responding, 32.6% said that profit margins were higher than a year ago, while 20.0% said they were lower and 46.9% said they were relatively unchanged.
Results of the quarterly survey are available on the ENR website at http://enr.construction.com/economics/quarterly_cost_reports/2014/0324-ENR-Confidence-Index-Rises-Dramatically.asp. For more information, contact Gary Tulacz, Senior Editor, ENR, at firstname.lastname@example.org.
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