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ENR survey finds measured optimism for construction industry

Post Time:Mar 30,2010Classify:Industry NewsView:100

The construction industry is signaling that industry conditions may begin to improve over the next 12 to 18 months, according to a survey in today's issue of Engineering News-Record magazine and on ENR.com, published by McGraw-Hill Construction, New York City. The ENR Construction Industry Confidence Index (CICI) for the first quarter of 2010 shows that construction and design firm executives are not confident that the industry recession will end in 2010, but a slow and steady recovery is expected into 2011, according to a March 29 release.The Q1-2010 CICI, which measures industry sentiment for market sectors and trends, is 34 on a scale of 100, where a value of 100 indicates an improving market and a value of 50 indicates a stable market. While still well-below an index of 50, the index shows a distinct improvement over last quarter (up three points from 31 in Q4-2009) and last year (up nine points from 25 in Q1-2009). The index is based on 705 responses to surveys sent to more than 2,000 domestic firms on ENR's lists of leading contractors and engineering firms, the release states.

When assessing the construction market, 68 percentof survey respondents say the current construction market is declining; 26 percentbelieve it had stabilized; and only 5 percentbelieve it is improving. However, survey respondents expect the picture to be different in 12 to 18 months, with 44 percentbelieving the construction market will be improving and another 44 percentbelieving it will have stabilized."ENR's CICI provides strong indicators for what is going on in the construction industry," said Janice L. Tuchman, editor-in-chief of Engineering News-Record, in the release. "What we are seeing is an optimistic outlook for a continued recovery. Of course it varies by sector, and there are clear winners and losers in today's market-the infrastructure, power and healthcare sectors remain strong, while there is less confidence in nonresidential building of offices, stores, hotels, and manufacturing-but overall, this year and next year, the industry will stabilize."The CICI survey also asked participants to gauge changes in credit availability for financing projects, and found that securing financing continues to be a challenge. No respondents claimed that credit is much easier to obtain, and only 7.2 percentof respondents said it was somewhat easier to obtain. In contrast, 28.9 percentsaid it is much tougher to secure credit for project financing; 21.8 percentsaid that it is only somewhat tougher to obtain; and 42 percentsaid that credit availability is about the same.The next quarterly survey results will be available in June 2010.

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