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How Different Groups View the Market

The ENR Construction Industry Confidence Index (CICI) for the third quarter shows that executives from 640 construction firms believe the recession is still deep and improvements in the market will not come for another 12 to 18 months. The index for the third quarter stands at 32 on a scale of 100. This is a two-point increase over the previous quarter’s level of 30 and a seven-point improvement over ENR’s first-ever CICI of 25.

The index measures industry sentiment about the current market, as well as beliefs about where it will be in three to six months, and 12 to 18 months. An index of 50 would mean a neutral or stable market. The Index is based on the responses to surveys sent out to over 2,000 domestic construction firms on ENR’s Top Lists. The current index is based on a survey conducted from Aug.27 to Sept. 10.

Of the 640 firms responding to this quarter’s CICI survey, 71% said the current construction market is declining, while 24% believed it had stabilized and only 4% said it was improving. Design firms, which would be on the front end of any turnaround, are somewhat more optimistic of a quicker recovery than the contractor community .

While these numbers indicate that pessimism continues to be rife in the industry, they are improvements over the previous two surveys. In June, 76% of respondents found the current construction market declining; 86% of respondents in the first CICI survey in April found the same.

CFMA Sees Uptick

Another survey finding an uptick in sentiment is the most recent CONFINDEX, which is about to be released by the Construction Financial Management Association, Princeton, N.J. CFMA polls 200 chief financial officers from general contractors, subcontractors, and heavy and civil contractors. “Our CONFINDEX went from 89 to 91 this go-around,” says Jim Bartsch, CFMA director of research and analysis. “This shows things are beginning to stabilize.” CFMA’s index is based on a scale of 200, with 100 being a stable market.

The CFMA survey asks CFOs their views on such issues as general business conditions, availability of bank credit, availability of bonding credit and total backlog. “The responses to all these issues were well into positive territory for 2010,” Bartsch says. In this latest survey, the CFMA rating for general business conditions in 2010 stood at 135 on a scale of 200.

In addition, CFOs give 2010 a rating of 112 out of 200 on prospects for maintaining or increasing backlog. “This shows an increase in optimism in the out years, which bodes well for our members,” say Bartsch. “We feel...