The downturn in confidence in CFMA's survey is a little surprising. "The economy has been disappointing, but the market is slowly rising," says Anirban Basu, CEO of economic consultant Sage Policy Group Inc., Baltimore, and CFMA economic adviser. He notes that the housing market is beginning to gain steam, too. "And we finally have a highway bill."
However, Basu says there are numerous problems that CFMA members are worried about, including signs that materials prices may begin to rise. "Despite the downturn, our members are also worried about a loss of skills in the workforce."
To see the full report in PDF format, ">click here (subscription required.)
Basu says the industry lost two million jobs during the recession; if there is a rebound in the market, many of those workers will not be back either from retirement or moving on to another industry." He say 42% of CFMA survey respondents were "concerned" or "very concerned" about future worker shortages, up from 37% in the last quarter.
Project financing is key for the industry, but there are signs credit may be loosening. As part of its survey, ENR asked whether project financing is more or less available that it was six months ago. Survey respondents continue to believe project financing has stabilized. For the second quarter, 22.2% said project financing was getting easier, while 16.6% said is was tougher. However, project financing remains tight; until it becomes more readily available, the recovery will be slow.
Among the individual sectors, the CICI survey shows that respondents are a little less confident. However, private-sector markets once again were considered the most active. Applying the CICI rating formula, the power sector was up three points, to 69, tying it with petroleum (up one point) and multi-unit residential (also up one point) as the strongest markets as perceived by the survey respondents. The hospital/health-care market also is seen as being strong, but it fell in the third quarter by three points, to a CICI rating of 65. The only other market showing significant gains was the environmental/hazardous-waste sector, which rose three points, to 58.
Several sectors were seen as falling from the previous quarter. The biggest decline was in the industrial and manufacturing sector, which fell six points, to 56, as corporate owners hold off launching projects pending the election. Buildings sectors also fell or were flat. The commercial-office (CICI 46 rating), hotels-and-hospitality (50) and higher-education (53) sectors all were down three points.