Confidence levels among construction industry executives continued to rise in the first quarter of 2017, according to the latest update of Timetric’s Construction Confidence Survey.
Having declined for six successive quarters, confidence levels improved slightly in Q3 2016 before gathering upwards momentum in Q4 2016 and Q1 2017, with the Construction Confidence Index (CCI) now standing at 67.2 points.
Moreover, with the CCI score comfortably above the 50-point mark, industry executives are clearly optimistic about growth prospects in the coming six months.
The Economic Impact Index (EII) for all regions continued to recover from a low of 42.2 in Q2 2016 to reach 51.3 in Q1 2017. The fact that the index has now surpassed 50 implies that for the first time since Q4 2014 respondents believe the global economy is having a favourable impact on their industry.
A number of major economies have struggled in recent times due to falling oil revenues; however, oil prices now appear to be recovering slightly thanks in part to OPEC’s recent output agreements reducing global supply.
The EII demonstrates the strength of the Asian region with both India and China’s economies exhibiting consistent growth. The South American region continues to feel the effects of recessions in Venezuela and Brazil with a reduction in oil revenue a key factor.
The EII for North America has remained stable following a fall in early 2016. The election victory for Donald Trump has boosted construction prospects due to his focus on large-scale infrastructure investment to boost growth and create jobs. The Australasia region has benefited from strong economic performance in both Australia and New Zealand.
In terms of the leading indicators analysed in the survey, both sales and headcount are expected to increase in the second and third quarters of 2017. In total 50.6% of respondents anticipate an increase in staff headcount, while 29.9% expect no change, and only 19.5% expect a reduction.
Regarding expectations of sales over the next six months, 76.5% of respondents anticipate an increase. Raw materials prices are expected to rise over the coming six months, with 76.1% of respondents predicting an increase. Energy prices are also set to increase over the forecast period, with 69% of respondents predicting an upturn.
Current Confidence Index. Note: Index >50 implies respondents are optimistic about growth prospects; index <50 implies respondents are pessimistic about growth prospects; index =50 implies respondents are neither optimistic or pessimistic.
* For more information on the Construction Confidence Survey, visit Timetric's Construction Intelligence Center.