Construction executives: Romney best bet for broad industry recovery

Source: Engineering News-Record

Construction leaders believe the industry’s recession will carry through mid-2013. According to the ENR Construction Industry Confidence Index (CICI) for the third quarter of 2012, construction and design firm executives believe that the market in the near term will continue to be flat, and that Republican presidential nominee Mitt Romney’s election represents the best bet for a broad recovery in 2013.

As part of the CICI survey, ENR conducted an election poll asking which candidate would be better for the construction industry. Of the 378 executives polled, 269 (or 71.2 percent) said Romney was the better choice. 14.8 percent said Obama would be better, and 14 percent were undecided. The margin of error is ±4.6 percent.

“The Q3-2012 CICI, which measures industry sentiment for market sectors and trends, is 50 on a scale of 100, where a value of 50 indicates a stable market, with the higher the value above 50 reflecting the wider the belief in an expanding market. This quarter’s figure indicates a belief that the construction market remains flat at a low level,” said Gary Tulacz, senior editor, ENR. “This is down from the Q1-2012 CICI rating of 58 from last April, where survey respondents believed the market was poised for recovery,” he added. The CICI index is based on 378 responses to surveys sent to more than 3,000 domestic firms on ENR’s lists of leading contractors and engineering firms.

Regarding the current market, the survey states that 32 percent of construction industry executives polled believe it is still in decline, while only 17 percent believe it is growing. “Only 25 percent of executives believe the construction market will grow within the next six months, with an equal number believing it will still be in decline. However, 51 percent think the market will improve by the end of 2013, compared to only 8 percent of respondents who feel the market will continue to decline in the next 12 to 18 months,” said Tulacz.

Based on comments volunteered by respondents, a number of executives claim that Obama was anti-business, interfering with overall growth in the economy. Others questioned Romney’s leadership. However, many executives focused on markets. “The public sector will see more work under Obama, while the private sector will see more work under Romney,” said one undecided executive.

Survey respondents believe the private-sector markets are the healthiest. The construction sectors perceived to be the strongest were petroleum, power, health care and multi-unit residential. Construction sectors seen as still in recession were the entertainment and cultural, commercial office, retail and K-12 education markets.

A concern among construction firms is that public sector spending will continue to be constrained by concerns over budget shortfalls and deficits. Confidence levels in such traditionally public market sectors as transportation, water and sewer have fallen over the last several quarters, and construction executives of companies working in those sectors do not see any significant recovery until 2013, after the presidential election.

The next quarterly survey results will be available in December 2012. To see a copy of the report, go to ENR’s website.

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