The survey of more than 900 presidents and chief financial officers measures industry confidence with its "optimism quotient" — which jumped to 109 this year, from 103 last year and 89 two years ago, The Wall Street Journal reported. A score above 100 signals an optimistic outlook for the next year.
While the equipment distributors surveyed were more optimistic than contractors, both groups overwhelmingly see 2005 as an improvement over 2004. Of the distributors, 59 percent see their business outlook improving in 2005, while only 5 percent see it declining. Contractors see their business improving by a slightly lower margin — 49 percent to 8 percent.
With interest rates rising, executives expect the office market to warm up. And more contractors say their business will focus on commercial space next year. Fairly steady job growth has returned to the general economy and that bodes well for the office market, which has been battered in the past three years by the economic downturn.
While the executives surveyed were overwhelmingly optimistic about their prospects for 2005, they remain concerned about rising costs and finding workers. More than four out of five said rising insurance costs will be a serious problem next year and two out of three said finding qualified labor will be a major concern.
Regionally, six of the nine regions in the survey reported increased optimism for next year. The East South Central region — which covers Alabama, Kentucky, Mississippi and Tennessee — surveyed best with an optimism quotient of 125, one of the highest in the history of the survey, with more than 80 percent of contractors expecting more bidding opportunities. The neighboring West South Central states — Oklahoma, Texas, Arkansas and Louisiana — ranked second, with nearly a third expecting commercial real-estate construction to pick up next year.
The Northeast continued to register the bleakest outlook in the industry, with contractors and distributors pessimistic about 2005.
