Highway Contractors’ Outlook Jumps 27 Points on Passage of Federal FAST Act
Missouri’s highway and building contractors report higher expectations for the construction industry’s economic outlook in a recent AGC of Missouri Contractor Confidence Index (CCI), looking six, 12 and 18-24 months ahead. The AGC of Missouri’s CCI Index was conducted online and at meetings in early April with member contractors, and compares to data collected three months ago.
Contractors in the AGC of Missouri’s Heavy/Highway/Infrastructure Division report a marked increase in their prospects over the next 24 months, rising 21 points in short-term confidence (six months), 16 points in the near term (12 months), and jumping nearly 27 points for 18-24 months, based on a 100-point index. Results over 50 points are considered trending positive, with the results coming in at 63.54 pts. (six months), 68.75 pts (12 months), and 59.52 pts. (18-24 months).
Leonard Toenjes, CAE, president of the AGC of Missouri, attributes the remarkably higher outlook in part to passage of the Fixing America’s Surface Transportation (FAST) Act in December that provides funding for federal highway projects for the next five years. “Washington still hasn’t solved the long-term prospects for funding infrastructure, but at least they saw their way clear to provide budget predictability for the next five years. Now Missouri needs to step up to the plate and resolve our state’s challenge of crumbling bridges and highways like I-70, which is falling into serious disrepair. Unfortunately, Missouri still ranks 4th highest in the nation in the number of structurally deficient bridges and the 11th highest in the nation in percentage of structurally deficient bridges. Not only is this a safety issue, but these rankings hurt our prospects for attracting new business and commerce.”
At the same time, commercial contractors in the AGC of Missouri’s Building Division report improved expectations going forward. Their outlook rose nearly 4.5 points for the short term (six months), increased nearly 4.0 points near-term (12 months), and rose one-half point for the longer term (18-24 months). The favorable results were: 67.86 pts (six months), 65.48 pts. (12 months), and 59.52 pts. (18-24 months).
“We are happy that all trends are positive, but, unlike 28 other states that showed employment growth between February and March 2016, Missouri shed 2,000 construction jobs during the same period,” added Toenjes. “ While other parts of the country have seen a full recovery in the building industry, Missouri has been lagging in its recovery, but it is still a recovery. We have grown employment by four percent, or 4,500 jobs, since March 2015. All signs point towards a continuing recovery with the announcement for such long term projects as the National Geospatial-Intelligence Agency (NGA) facility. We are thankful for that.”
This survey was developed by the AGC of Missouri and was distributed online as well as in-person at recent meetings to member contractors. The CCI index is released quarterly* and is designed to be an additional tool to help business, government and institutional leaders plan for the future.
*Due to scheduling difficulties, no 3rd Q 2015 survey was conducted.