Commercial Construction Confidence Rising but Still Low

By Karen L. Edwards, RCS Editor.  

The U.S. Chamber of Commerce Q4 2020 Commercial Construction Index is creeping up but still below pre-pandemic levels.  

The Q4 report saw the index rise from 57 in the third quarter to 59 in the fourth, still much lower than the first quarter of 2020 which was at 74. Highlights of the fourth quarter are that 83 percent of contractors reported project delays related to coronavirus and many think those delays will extend through January 2021. Over one-third (41%) of respondents report that availability of materials and products is severely affecting their businesses.  

Lumber shortages are the top concern for contractors with 31 percent reporting shortages. This is up significantly from Q3, where only 11 percent reported issues with lumber shortages. The report explains, “Lumber has seen higher demand due to a boom in residential construction since the pandemic began. The other top reported shortages are steel (11%), electrical products other than copper wire (11%), and lighting products (10%).” 

Skilled labor shortages continue to remain an issue for contractors with many seeing an increasing impact on their businesses. 83% of contractors reported difficulty in finding skilled labor and because of this are asking their current skilled workers to do more. 71% reported struggling to meet scheduling requirements and 39 % have turned down work due to lack of labor.  

The report found that revenue and profit margin expectations have increased slightly with 25 percent of contractors expecting to see a revenue increase. 20 percent anticipated profit margin increases over the next year. The project financing outlook improved slightly for Q4 as well with over half of the respondents indicating they believe that building owners access to financing will get easier over the next six months.  

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About the U.S. Chamber of Commerce 

The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Our members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations. They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated for pro-business policies that help businesses create jobs and grow our economy.