NEW YORK, March 21, 2013 /PRNewswire/ -- The construction industry has begun its recovery and 2013 will show meaningful gains in what has been a sluggish industry, according to construction executives surveyed in today's issue of Engineering News-Record (ENR) magazine and on ENR.com (http://enr.construction.com/), published by McGraw-Hill Construction (http://www.construction.com/). The ENR Construction Industry Confidence Index (CICI) for the first quarter of 2013 shows a dramatic leap in expectations about the current and near term by construction and design firm executives.
The Q1-2013 CICI, which measures industry sentiment for market sectors and trends, is 64 on a scale of 100, indicating a belief that the market is in recovery mode. This quarter's figure is significantly higher than the Q4-2012 CICI rating of 50, where survey respondents characterized the market as still in decline and struggling to make real gains. The index is based on 376 responses 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 13% of industry executives polled believe it is still in decline, while 32% believe it is growing. Further, 44% believe the market will be in growth mode within the next six months. Construction executives firmly believe that there will be a full recovery in 2014, with 58% saying the market will be on the upswing, compared to only 8% of respondents who believe the market will continue to be in decline in 12 to 18 months.
Survey respondents believe the private-sector markets are the healthiest. The construction sectors perceived to be the strongest were petroleum, power, health care and multi-unit residential. All sectors measured by the survey were on the upswing except the water supply and sewer market, which was flat.
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 56.4% of survey respondents said that project financing has been unchanged from six months ago, 31.9% said that credit for project financing was actually easing from the level it was in mid 2012. This compares to last quarter, when only 19.9% found project financing to be getting easier, while 15.9% found financing was getting tougher.
A significant concern among construction firms is that public sector spending will continue to be constrained by concerns over budget shortfalls and deficits. President Obama's state of the union address pledging support for funding the nation's infrastructure caused some construction executives to take heart. However, only 27.1% of survey respondents believe this pledge to increase infrastructure spending will actually result in added public funding. In addition, 33.5% said that public spending on infrastructure will remain unchanged while 20.7% expect lower levels of public funding this year despite the President's pledge.
For more information and methodology, visit http://enr.construction.com/engineering/pdf/ENR03252013QCR.pdf or contact Gary Tulacz, Senior Editor, ENR, at Gary_Tulacz@mcgraw-hill.com.
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SOURCE McGraw-Hill Construction