"Our members' outlook over the next year relates to a lack of confidence in Congress and the [Obama] administration working together, as reflected in the current stalemate over the 'fiscal cliff' negotiations," says Basu. He says that if the automatic tax increases and spending cuts go into effect, the construction industry would be hurt. "Owners are not willing to take risks where there is so much uncertainty in the economy and the markets."
Binstock notes that CFMA members are worried about other issues. He says in the latest survey, 51% of CFOs said they were worried about the availability of skilled workers should the market turn around, up from 42% in the third quarter. "A market upswing will bring a major shortage in skilled labor, similar to what we saw before the financial crisis of 2008." He also says that 46% of CFMA respondents were concerned about the availability of funds for infrastructure projects.
Among the individual sectors, the CICI survey shows that some respondents are a little less confident. There was little if any change in most market sectors. However, applying the CICI rating formula, the power sector fell eight points, to 61, possibly reflecting energy company concerns about large initial financial outlays in an slow economy.
The entertainment/theme parks/cultural market dropped nine points to 38 from 47. This drop-off in consumer-destination projects is one more indicator that owners are worried about consumer sentiment in the current economy.
Basu says that industry confidence in the market can shift quickly if political and economic conditions change. Once the deadlock over the fiscal cliff negotiations is finally broken, much of the economic uncertainty should clear up, allowing owners to make more informed project decisions, he says.