Construction Industry to Level off in 1996

By Beavers, Kim | Business Credit, April 1996 | Go to article overview

Construction Industry to Level off in 1996


Beavers, Kim, Business Credit


Construction activity in the United States is expected to level off - and may even diminish - this year, according to a study by a major industrial financing company. The report, the 20th consecutive edition of the "Construction Industry Forecast," was released in January by The CIT Group/Industrial Financing.

The projection was based on an in-depth analysis of telephone interviews with 900 construction equipment distributors and contractors across the country. Robert J. Merritt, president and CEO of The CIT Group/Industrial Financing, noted that only 36 percent of those surveyed expect increased activity in 1996 - down from 43 percent a year ago - while 14 percent anticipate reduced levels - up from 12 percent in the 1995 forecast. This, according to the report, comes after a four-year trend of overall expansion in the nation's construction industry.

An index, the "Optimism Quotient," was created by combining and averaging survey respondents' projections. That data included were then used to analyze and determine a final forecast for the year ahead. The report notes that in every case where the Optimism Quotient reached or exceeded 100, the actual value (in constant dollars) of new construction activity that year increased from the previous year. Whenever the index was less than 100, the value of new construction for that year went down. For the year ahead, the overall index is 95 - down 10 points from 105 in 1995.

The study also made predictions based on regional analyses of construction activity in both the residential and non-residential sectors. Regional indexes range from a low of 75 to a high of 115. Eight of the nine regions included in the study indicated that they were less confident about 1996 forecasts for the construction industry.

The most significant decreases in confidence were reported in the Mid-Atlantic, New England and West North Central regions. Each of these areas experienced declines of at least 20 points from last year. The lowest rates of decline were reported in the Southeast, East South Central and Pacific Mountain regions, each of which saw an average decrease of four points over the past year.

Only one region expressed confidence in the construction industry for 1996. The West South Central region, which consists of Arkansas, Louisiana, Oklahoma and Texas, saw its regional projections climb in each of the past three forecasts conducted by The CIT Group/Industrial Financing. Forty- four percent of distributors surveyed expect that a strong local economy will help bolster construction sales this year. A smaller percentage of polled contractors, 36 percent, expressed a similar faith that 1996 will be a profitable year for the industry.

The second-highest confidence levels were reported just to the east. Nearly half of all distributors surveyed (47 percent) in the East South Central region, consisting of Alabama, Kentucky, Mississippi and Tennessee, predict that non-residential activity will increase in 1996, compared to only 4 percent who expect a decline. Distributors here are the most optimistic in the nation when it comes to residential activity - 45 percent of regional respondents expect an increase in this area. Both distributors and non-building contractors in this region anticipate that the increases will come from private projects.

The study indicated that the smallest decline was in the Pacific region, which is made up of Alaska, California, Hawaii, Oregon and Washington. These states had plateaued in the 80s range of the Optimism Quotient for four years before jumping to an even 100 last year. This year, the region fell only one point, to 99. Contractors are slightly more confident than distributors, according to the study, and distributors are less confident about expectations for residential activity than the national average.

Those surveyed in the South Atlantic region Delaware, the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia - came closest to the national average, according to the study. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Construction Industry to Level off in 1996
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.