Confidence among construction industry executives slid in 2Q19
Published by Lucy Stewardson,
GlobalData’s Construction Confidence Index (CCI) is a barometer of confidence in the global construction industry, with regard to growth prospects in the short term. The CCI fell to 63.9 points in 2Q19, down from 64.8 in 1Q19. This marks the ninth consecutive decline in the CCI score, with the 2Q19 figure being the lowest CCI score since 4Q16.
Despite the decline, the CCI score remains comfortably above the 50 point mark. According to GlobalData, this suggests that industry executives remain optimistic about growth prospects in the coming six months.
The Economic Impact Index (EII) at the global level picked up marginally in 2Q19, improving to 53.8 points from 52.6 in 1Q19. The index has remined above the 50 point mark since 1Q17. GlobalData has noted that scores above 50 signify that respondents overall believe that the global economy continues to have a generally favourable impact.
The EII score for North America has continued to improve, reaching 58.9 points in 2Q19, up from 58.1 in 1Q19. Economic growth in the region remains solid, but, in the US, this has in part been driven up by stockpiling, as firms have reacted to threats posed by the trade war with China. The EII score for Latin America remains the lowest among the global regions, but it edged upwards in 2Q19 to reach the highest level since 3Q17, at 40.2 points. The index remains far below 50, suggesting an unfavourable impact, with major economic and political challenges persisting throughout the region.
“Amid the general slowdown in economic growth, the EII score for Western Europe has continued to fall in recent quarters,” said Danny Richards, Lead Economist at GlobalData. “However, on balance, the region’s economic performance is still considered to be having a positive impact on the construction industry. It is a similar case in Eastern Europe, where the EII score has declined, but is still above the 50 point mark.”
The Middle East recorded a steep drop in its EII score in the latter part of 2018 and into 1Q19. This is likely to have reflected the fall in oil prices. However, there was a slight improvement in 2Q19, with the score rising to 44.5, mirroring the rebound in the oil market. The EII in the Africa region has remained marginally below the 50 point mark for the third consecutive quarter, dropping back to 48.6 points in 2Q19.
Asia continues to post the highest EII score among the global regions, and there was a sharp improvement in 2Q19, to 66.8 points. The region continues to benefit from high investment, increasing urbanisation, and relative political stability. The EII for Australasia has remained relatively high in recent quarters, although there has been some minor volatility. In 2Q19, the region’s EII stood at 61.4, which was down marginally from 1Q19’s score of 62.3. Australia’s economy has underperformed in recent quarters, and the Reserve Bank of Australia has revised downwards its economic growth forecasts.
Read the article online at: https://www.worldcement.com/europe-cis/31052019/confidence-among-construction-industry-executives-slid-in-2q19/
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