Optimism in nonresidential construction hits 20-year high

Many in the industry feel that 2018 could be one of their best years ever

Optimism in nonresidential construction hits 20-year high

Optimism among construction-industry executives about activity in nonresidential construction reached its highest level in 20 years, according to survey results released by Wells Fargo Equipment Finance.

The Optimism Quotient, the survey’s primary benchmark for measuring industry confidence, is 133 for 2018. The latest quotient marks a 10-point increase from the 2017 level. A score greater than 100 indicates strong optimism for increased local, nonresidential construction activity versus the prior calendar year. The nationwide survey covers industry contractors and equipment distributors.

“It’s exciting to see this level of optimism. It reflects what we have heard from our customers about the strength of the market,” said John Crum, senior vice president and national sales manager of the construction group at Wells Fargo Equipment Finance. “Many industry participants feel that this could be one of their best years ever.”

Although most distributors and contractors have a positive outlook on construction activity and industry expansion, only a smaller share expect the growth rate to remain at this level over the next two years.

In spite of the two-year outlook, the survey found that the majority of the industry still expects to see it expand. The survey revealed that 73% of contractors expect expansion as the most likely scenario over the next two years. Only 19% said the current level of activity will remain static. Meanwhile, only 9% of contractors and 9% of distributors said that activity level will contract in the same time span.


Related stories:
Builders are confident about apartments, condos
Pro-business political climate buoys builder confidence in February