Construction industry leaders believe the worst may soon be over

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The recession that everyone hoped would end quickly, has turned to grit and determination to hold on until better times, ENR/com reports. While no one sees the current market as ready to take off, major firms are beginning to think the market may soon hit bottom and slowly begin to pull itself back from the brink in 2011.

The ENR Construction Industry Confidence Index (CICI) for the second quarter of 2010 shows 555 executives from construction and design firms believe that, while the market continues to flounder, next year it will be on the rise. The index for the second quarter of 2010 rose dramatically to 41 on a scale of 100 from the first quarter’s 34, and it showed a 10-point rise over the fourth quarter of 2009.

The CICI measures industry sentiment regarding the current market and beliefs about where it will be in three to six months and in the next 12- to 18-month period. An index of 50 would mean a stable market. The CICI is based on responses to surveys sent to more than 2,000 U.S. firms on ENR’s lists of leading contractors, subcontractors and design firms. The current index is based on a survey conducted over a two-week period earlier this month.

While 53% of all respondents say the market still is in decline, this percentage is an improvement over the first quarter, when 68% saw a declining market. Further, only 37% believed the market would continue to decline over the next three to six months, compared to 45% in the first quarter. As in past surveys, designers continue to be more optimistic about a turnaround in the short term than general contractors or subcontractors.

Survey respondents showed increased confidence in almost all market sectors measured by the survey. Applying the CICI rating formula, only the petroleum market, rocked by economic and regulatory uncertainties in the wake of the BP oil spill in the Gulf of Mexico, saw a significant decline—from 51 on a scale of 100 in the first quarter to 44. The only other market sector to lose ground was transportation, going from 55 to 54.

Health care was the market about which survey participants were most confident, earning a rating of 65. The only other buildings market in positive territory was higher education, at 52.

While most markets in the buildings sector gained over the past quarter, respondents continued to believe the recovery in the sector still is a long way off. The only big improvement in attitudes in the buildings sector was multi-unit residential, which rose from a 31 rating to 39.

Infrastructure markets continue to be seen as the healthiest, with power (64), hazardous waste (63) and water, sewer and wastewater (62) the strongest.

Click Here to view the ENR.com article.

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