The 2019 forecast reveals sustained confidence for the industry and expectations that expansion is more likely than contraction. The results are a tempered decrease from 2018 record-high optimism.
Conducted by Wells Fargo Equipment Finance in late 2018, the survey tallied opinions of industry contractors, manufacturers, and equipment distributors to determine the National Optimism Quotient (OQ) — a key indicator of whether or not local, nonresidential construction is likely to increase or decrease in the coming year. The 2019 OQ remains in strongly optimistic territory at 122. Although optimism declined slightly from 133 in 2018, most executives maintain an encouraging outlook on industry expansion and 2019 net profits.
OQ scores above 100 represent strong optimism for increased local construction activity relative to the perceived level of activity the prior year. Scores between 75 and 99 denote more cautious or measured optimism. A score below 75 signals a more pessimistic point of view, where fewer executives say local construction activity will increase than say it will decrease.
“Even if this year’s activity remains the same as last year, many see it as a positive for the industry due to significant growth over many years,” said John Crum, Construction Group national sales manager for Wells Fargo Equipment Finance. “If 2019 turns out the way survey respondents indicate, we could be in for another good year.”
Although there are outlier years, data over time shows that the OQ tracks closely with four economic indices that are significant to the construction industry outlook:
Architectural Billings Index
Private Construction Index
Industrial Production Index
Public Nonresidential Construction Index
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