Based on the latest U.S. Chamber of Commerce Commercial Construction Index, U.S. contractors are growing increasingly more optimistic which is mainly driven by a rise in revenue expectations.
In the first quarter of 2021, 36% of contractors said they expect to see an increase in their revenue over the next 12 months, which is an increase of over 11% since the fourth quarter of 2020. Over 87% of contractors expect their revenue to either stay the same or increase over the next months which is again showing an increase from the fourth quarter of 2020. In addition, approximately 46% of contractors are confident they will employ more people in the next 6 months which is nearly a 10% increase from the fourth-quarter report.
Despite the positive news from the contractors polled above, the index remains approximately 12 points below its score from the first quarter of 2020, which was pre-pandemic Currently, contractors’ top concerns, which are of no surprise, are related to the ongoing effects of the COVID-19 virus. Those concerns include project shutdowns and worker safety to highlight a few. Another challenge contractors are going to be faced will be finding skilled workers, material shortages and cost fluctuations, with the rising cost of lumber being of the utmost concern.
A few additional findings from the index show that tariff and trade concerns are increasing with most contractors saying steel and aluminum tariffs will have a significant impact on their business over the next handful of years. Additionally, more contractors are planning to increase their spending on tools and equipment, however not nearly to the levels before the pandemic. One final and interesting finding from the most recent Index is that nearly 80% of contractors are still experiencing delays that are directly related to COVID-19. Clearly, the impact of the COVID-19 pandemic will continue to be felt in the year ahead.
If you have any questions don’t hesitate to contact us or check out the Schneider Downs Construction Industry Group.
