CCI Reports Drop in Const. Confidence

June 25, 2020
USG Corporation + U.S. Chamber of Commerce Commercial Construction logo.

The USG Corporation + U.S. Chamber of Commerce Commercial Construction Index plunged from 74 in Q1 to 56 in Q2. Two of the index’s three main indicators, confidence in new business and revenue expectations, fell 26 points, to 50 and 44 revealing the impact of the coronavirus pandemic. The third indicator, backlog, dropped only a modest three points, remaining consistent with the first half of 2018. Survey results were largely collected in the month of April, at the height of shutdown restrictions. 

According to the index, only 16 percent of contractors express high confidence in the market’s ability to provide new business opportunities in the next 12 months (down from 54 percent in Q1), and there was a 30 percentage point drop in contractors expecting their revenues to increase by 17 percent in Q2, 47 percent in Q1. The percentage expecting to see their revenues decrease in the next 12 months spiked from 2 percent in Q1 to 21 percent in Q2.

About 60 percent of contractors report they have at least six months of backlog (compared to 69 percent in Q1). Over 83 percent say their revenue will increase or remain the same next year. Three in four contractors say they have moderate or high confidence that the next year will bring sufficient new business.

Impacts from Coronavirus

In April 2020, 87 percent of contractors reported they were currently experiencing delays due to the coronavirus outbreak, with 87 percent expecting delays to continue into the summer and 73 percent expecting delays will remain in the fall. In April, over a third of contractors reported that at least 75 percent of their projects were delayed. Only 16 percent of contractors expected the same in three months, and eight percent in six months. 

More than 92 percent of contractors said they changed work procedures to increase social distancing. Contractors indicated worker health and safety is top of mind. About 75 percent said worker health and safety is a top concern, followed by fewer projects at 48 percent, and increases in workforce shortages at 33 percent.  

Source: USG Corporation + U.S. Chamber of Commerce Commercial Construction