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High Expectations for Commercial Construction Activity
Construction industry executives are particularly optimistic regarding the prospects of local, nonresidential construction activity this year, according to a recent Wells Fargo Equipment Finance survey of industry contractors and equipment distributors. The 2017 Construction Industry Forecast revealed increased optimism driven by expectations of industry expansion through higher infrastructure spending and increased company profits.
The survey uses an Optimism Quotient (OQ) as its primary benchmark for measuring construction industry contractor and equipment distributor sentiment. 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 of 75 to 99 represents more cautious or measured optimism. A score below 75 signals that fewer executives say local construction activity will increase than say it will decrease, a more pessimistic point of view.
The OQ for 2017 is very positive at 123, a marked increase over the OQ score of 108 registered in 2016. After a big dip from 2007 to 2010, industry optimism has rebounded and remains increasingly positive. This year's OQ is the third highest recorded number in the past 20 years. It also represents the sixth consecutive year the OQ was higher than 100, and the seventh consecutive year of optimism.
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