Associated Builders and Contractors (ABC) forecasts a continued steady economic recovery for the U.S. commercial and industrial construction industries in 2016. The current recovery could end up challenging the lengthiest recovery in U.S. history, which lasted 120 months between March 1991 and March 2001.
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“ABC’s leading indices each suggest that 2016 will be another solid year for the typical U.S. nonresidential construction firm. ABC’s Construction Confidence Index encompasses expectations with respect to hiring, profit margins, and projected sales growth. According to the most recent survey, overall contractor confidence has increased with respect to both sales (67.3 to 69.4) and profit margins (61 to 62.9). And while the pace of hiring is not expected to increase rapidly during the next six months, largely because of the lack of suitably trained skilled personnel, the rate of new hires will continue at a steady pace.
“A weak global economy and stronger U.S. dollar will prevent the U.S. economy from surging ahead in 2016,” said Basu. “Stakeholders can expect a 2.2 percent rate of growth (or similar to that) next year. There are significant risks to the downside, including volatile financial asset prices. The recent softening of job growth may keep the Federal Reserve pinned on the sidelines for the balance of 2015. Under most conceivable scenarios, rate increases will be gradual and intermittent. However, construction stakeholders can find reasons for encouragement. The U.S. unemployment rate has fallen, and the nation is roughly a year away from full employment. Wage growth is set to accelerate, which should keep the consumer spending-led recovery in place.”
More on the Associated Builders and Contractors report can be found here.