ENR Construction Industry Confidence Index (CICI) has dropped seven points from 58 points at the end of the 2nd quarter to 51 points at the end of the 3rd quarter. 50 points reflects a stable market, so this drop indicates signs that there may be slow down. A downturn continues to be anticipated for 2020. CICI has been at or over 51 points for the past 27 quarters.
The Federal Reserve cut the rate again last week, lowering rates to a range of 1.5 to 1.75 percent. The United States economy remains relatively strong, although new government figures show that American economic growth had inched lower in the last several months. Gross domestic product grew at a 1.9 percent annual rate for the third quarter, according to preliminary data released by the Commerce Department. Business investment fell 3 percent, with spending on factories and offices dropping more than 15 percent.
Engineering News – Record Construction Industry Confidence Index has dropped 7 points to 51 (out of 100 where 50 mean a stable market). Steady Growing – but are showing signs that there may be slow down. A downturn is anticipated for 2020. CICI was at or over 51 points for the past 27 quarters.
Dow Jones Industrial Average Index started 2019 at 22,686
And has gained 4,230 points in the first three (3) quarters of 2019 (26,916 on September 30, 2019).
Unemployment Labor Rates (construction) continue to decrease (3rd quarter 2019) compared to 2018 levels (1st quarter 2018) but has been steady in the second and third quarters of 2019.
Construction Unemployment Rate
Escalation – SLAM Estimating recommends an escalation rate three and 1/2 percent (3.050%) per year for the balance of 2019 and 2020 then four percent (4%) per year thereafter.
General Note – 2020 is an election year where the economic is generally strong.
Fluctuation in material costs based on changes with falling energy charges. The result in falling materials pricing is offsetting the rising cost of project delivery.
Architecture Billings Index (ABI) indicates that non – residential demand for design services has dropped in the 2nd quarter 2019. This down turn is generating concerns about new construction activities in the next 9 to 12 months.