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CCI: Contractor Confidence Steady, But Far Below Pre-Pandemic Levels

Post Time:Sep 30,2020Classify:Industry NewsView:967

Contractor confidence has remained steady in the third quarter of 2020 but the score is still significantly below pre-pandemic levels. The Commercial Construction Index (CCI), released quarterly by the U.S. Chamber of Commerce and Dodge Data & Analytics, rose one point from the Q2 CCI to 57. The Q1 CCI was 74, which at the time was in the midrange of scores over the last three years.

The three key drivers behind the score showed mixed results. Confidence in the construction market and revenue expectations nudged upward, while backlog went down slightly.

New Business

Contractors’ confidence in the ability of the market to provide new business in the next year rebounded slightly, increasing six points to 56. This score was 76 in Q1, prior to the COVID-19 pandemic.

Most contractors (82%) report that they have moderate to high confidence that the U.S. market will provide sufficient new business opportunities in the next year, up from 75% in the second quarter. Contractors also are optimistic when looking ahead to the next 24 months. Eighty-six percent report moderate to high confidence in new business. However, that is down from 93% in the second quarter.

Revenue

Revenue expectations for the next 12 months rose four points to 48 as many contractors saw projects ramp back up following the initial shutdowns. This score was 70 in Q1.
Contractors are almost evenly split between those anticipating an increase in revenue and those expecting a decrease, with 22% expecting an increase in the next year (up from 17% in Q2), and 19% expecting a decrease (a slight decline from 21% in Q2). Of those expecting an increase, nearly half believe it will be an increase of up to 3% in revenue. Of those expecting a decrease, a third believe it will be a decrease of 10% of more.

More than half of contractors expect their revenues to remain about the same in the next year.

Backlog

Backlog fell from 73 in the second quarter to 68 in the third quarter. This score was 76 in the first quarter. The optimal level of backlog on average was virtually unchanged, shifting from 12.2 months in Q2 compared to 12.3 months in Q3. The average number of months of backlog projects fell from nine months in Q2 to 8.3 months in Q3.

According to the CCI report, the impact on backlog from the crisis may lag for several months as projects are delayed.

Methodology

The data in the report is from a Q3 2020 survey conducted online from July 13-20, 2020. Half of respondents are prime contractors and half are specialty trade contractors.

Source: usgnnAuthor: shangyi

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