Building Confidence Index reaches another low
The First National Bank/Bureau for Economic Research Building Confidence Index fell to a multiyear low of 22 in the third quarter, from 29 in the previous quarter, a two-decade low.
The current level of the index indicates that close to 80% of respondents are dissatisfied with prevailing business conditions.
Five of the six subsectors included in the survey registered lower confidence levels, led by a 22-index-point drop in building subcontractor confidence.
In contrast, building material manufacturer confidence increased to 39.
Of the six subsectors, only building material manufacturers recorded higher confidence during the period, compared with the preceding quarter.
Weaker activity growth was a key driver of lower confidence, which also affected profitability. The weaker activity in the quarter was largely owing to a marked decline in residential building work.
Nonresidential activity growth was unchanged from the previous quarter.
Architect confidence fell to 21, while that of quantity surveyors remained depressed at 15, from a previous level of 16.
Subcontractor building confidence was also back down to its first-quarter level of 21.
The third quarter’s survey results indicate a negative outlook for the building sector, with output growth likely to be in line with or worse in this quarter than recorded in the previous quarter.
This is reflected in a downbeat outlook persisting, with an increasing number of contractors stating that the lack of new building demand is a severe constraint on their businesses.
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