Wells Fargo’s 45th annual construction industry forecast revealed an initial decline in sector sentiment on the tail end of a complicated 2020 and renewed optimism for the second half of 2021.
In November 2020, the bank queried hundreds of industry executives to determine the 2021 U.S. National Optimism Quotient (OQ). Survey results showed leaders ended 2020 feeling cautiously optimistic, with a 2021 OQ score of 78, representing a 21-point drop from 2020.
“From a global health pandemic to civil unrest to a historical election year, it was more important than ever to survey our construction industry peers to understand their sentiment as they reflected back on the past 12 months and anticipate what 2021 might bring,” James Heron, national sales manager for Wells Fargo Equipment Finance’s construction group, said.
The OQ is the survey’s primary benchmark for measuring the degree of optimism in the nonresidential construction business for the coming year. The survey posed questions about equipment sales, purchase expectations and rental market trends while also exploring major cost and risk concerns industry executives were considering as they geared up for the new year.
At 78, the 2021 OQ indicates optimism tempered with restraint. Any score between 75 and 99 indicates more cautious or measured optimism. An OQ score of 100 or more represents strong optimism for increased local construction activity relative to the perceived level of activity for the prior calendar year. A score below 75 signals that most responding executives believe local construction activity will decrease — a more pessimistic point of view.
The 2021 score represents a significant dip compared with the 2020 OQ of 99, which was just shy of the 100 points considered strongly optimistic. Other key findings of this year’s survey include:
Industry Optimism
Trends in Rentals and Purchases
Top Cost Concerns
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