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Reports: Strong Pulse for Construction

Wednesday, October 14, 2015

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From credit risk to construction spending, all signs point to a strengthening U.S. construction industry.

A new report suggests that credit risk is improving among construction firms. Moreover, new data shows construction spending has reached a nine-year high.

Unemployment has also dropped among contractors, hitting its lowest September level since 2000, new data reveals.

Paying Debts Quicker

Construction companies are paying their bills two days faster than they were a year earlier, according to Creditsafe Inc., a global supplier of online business credit reports.

paying bills
©iStock.com / Tatomm

An analysis of 1.7 million U.S. construction firms shows consistent improvements in payment performance as well as credit ratings, according to Creditsafe Inc.

Of approximately 1.7 million construction companies analyzed, the report found that contractors are paying their bills 9.5 days past their due date.

Further, the report found that the number of companies considered in the “high-credit-risk” category has declined 5.8 percent, whereas the “low credit-risk” group has grown by 1.7 percent, according to Creditsafe.

‘Promising’ Results

“What this data tells us is that the construction industry in the U.S. is getting stronger,” said Matthew Debbage, CEO of the Americas and Asia-Pacific Creditsafe.

“We can see that overall credit ratings are improving, construction firms are paying their bills more quickly and there are fewer legal filings on record, such as tax liens and bankruptcies.”

However, the report also revealed that there are 2.3 percent fewer U.S. construction companies in business compared to last year.

Debbage explains that this contraction is “actually a positive growth sign because when the economy grows, we traditionally see weaker companies eliminated, as the stronger, healthier players emerge.”

Highs: Jobs and Spending

The optimism may be warranted, as employment and construction spending have also surged in recent months.

In its analysis of the latest Census Bureau figures, the Associated General Contractors of America reported that construction unemployment has fallen to its lowest September level in 15 years.

contractor
©iStock.com / Gringos012

Construction unemployment has fallen to its lowest September level in 15 years, the AGC reported in its latest analysis of federal data.

The number of unemployed jobseekers in September who last worked in construction totaled 479,000, the lowest figure for September since 2000, AGC reported Oct. 2, noting that the unemployment rate for such workers was at 5.5 percent.  

Moreover, the AGC says Census Bureau data showed that the growth in construction spending accelerated to a nine-year high of 13.7 percent in the latest 12 months—August 2014 to August 2015—from a 2.7 percent rate a year earlier.

Despite the growth signals, AGC reports that many firms are reporting difficulty in staffing craft worker and supervisor roles.

   

Tagged categories: Business conditions; Construction; Economy; Market; Workers

Comment from john lienert, (10/14/2015, 7:04 AM)

HIP HIP HOORAY


Comment from Tom Schwerdt, (10/14/2015, 8:25 AM)

Woo! Almost as low as the economy as a whole (5.5% versus 5.1%) Although, the only occupations which are noticeably higher than Construction are: Oil&Gas/Mining and Hospitality. The Oil&Gas unemployment is huge - over 11%! Average weekly earnings and average wage in Construction are both down compared to July and August.


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