Commercial construction contractors are feeling good about the future, new research indicates.
The inaugural USG + U.S. Chamber of Commerce Commercial Construction Index (CCI) measured a healthy 76 for the second quarter of the 2017, up slightly from the first quarter.
“Through the Index we are able to identify areas of strength and pinpoint areas of improvement where industry leaders must focus,” said Jennifer Scanlon, president and chief executive officer of USG Corporation.
The CCI measures commercial contractor confidence based on backlogs, new business, and revenue projections over the next 12 months.
Contractors have a healthy amount of business already in the pipeline. Ideally contractors want at least 12 months of business booked. They’re close at 9.9 months. Eighty-two percent said they had stable or increasing backlogs, and increased from the first quarter, and nearly half (47%) had increased backlogs in the last three months.
Contractors have lots of confidence that new business will come their way in the next 12 months. Almost six in ten said they have high confidence, while nearly all the rest have moderate confidence.
Breaking down the survey by contractor size and region, confidence is highest among midsize and large contractors and in the Midwest and West.
Along with strong confidence in new business, nearly all commercial contractors (96%) expect revenues over the next 12 months to increase or stay the same. Four in ten expect more revenue in the next year, while 56% expect it to stay the same.
In addition to higher revenues, over a quarter expect profit margins to rise and nearly 70% expect them to stay the same.
Finding Skilled Workers
Despite the high levels of confidence, there are some warning signs from the survey. While two-thirds expect to hire more workers in the next six months, six in ten have trouble finding skilled workers.
Concrete, interior finishing/millwork, and masonry are the three most difficult skills to fill for contractors.
“The projected growth uncovered in this research is good news for employers and workers, but there is reason for concern in the lack of qualified talent available in vital specialties,” said U.S. Chamber president and CEO Tom Donohue. “To get our economy growing to its full potential, we must ensure that we have a workforce that is ready to fill the available jobs.”