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2020 CIRT Sentiment Index: Fourth Quarter Report | FMI

2020 CIRT Sentiment Index: Fourth Quarter Report

INDEX MOVEMENT

Results from the fourth quarter 2020 survey show a continued return to confidence, seen in both the Sentiment Index and in the Design Index. The Sentiment Index increased slightly, rising from 52.1 to 54.2, and the Design Index improved from 49.3 to 64.8. This trend is reflective of the cautious optimism toward stability for next year, especially when compared to the significant losses experienced through the first half of 2020. Continued relaxing of social distancing requirements, significant government stimulus and improved client confidence have all contributed to improved expectations. This quarter marks the first time since first quarter 2020 when both indexes read above 50, suggestive of increased demand for design and construction services in the future.

Current issues topics in this quarter’s survey assessed the potential impact, both positive and negative, across a variety of trends affecting U.S. economic/business conditions in 2021. More than half of respondents, or 60%, selected U.S./world health issues, vaccines or pandemics as one of the top most positive impactful factors, followed by private sector investment (45%) and the results of the U.S. presidential and congressional elections (40%). Conversely, the majority, or 54%, of respondents selected the results of U.S. presidential and congressional elections as one of the top three most negative impacts to the U.S. economic/business conditions in 2021, followed closely by U.S./world health issues, vaccines or pandemics at 43%.

Comparing these results to the same question asked at this time last year, the top three positive factors selected in 2021 were not only in a different order but also their intensity or percentage levels were much higher than the top three in 2020. Moreover, ALL of the top negative factors from last year, except for the results of the U.S. presidential and congressional elections, have been replaced with a new set of concerns that didn’t even make it among the top five a year earlier. The sole remaining common thread across both the positive and negative results is the importance and the pivotal role elections have on the business and economic climate. Looking to 2021 it is noteworthy that managing U.S. and world health issues plays a comparable pivotal role in the well-being of our future business and economic climate.

When asked about revenue performance for calendar year-end 2020 and 2021, respondents provided a wide range of expectations. Survey results for 2020 suggest that most, or 58% of respondents, will face decline with an average aggregated response of 2.8% contraction. Ad- ditionally, respondents are generally more optimistic about revenue performance next year. Results for 2021 suggest that a slight majority, or 52% of respondents, anticipate a return to positive revenue growth with an average aggregated response of 1.5% increase.

Among the industries represented by CIRT’s member base, lodging, residential and education work are projected to experience the biggest short-term declines across both the design and construction industries. The design industry’s long-term view of project growth remains positive, with every sector tracking above 3.0. The construction industry’s long-term view is similarly optimistic, with just two of the 10 sectors projected below 3.0 (lodging and commercial).

CIRT SENTIMENT INDEX AND DESIGN INDEX SCORES FROM Q3 2018 TO Q4 2020

To access the full report including all charts and graphs, please download the PDF.


ABOUT THE CONSTRUCTION INDUSTRY ROUND TABLE (CIRT)

The Construction Industry Round Table (CIRT) is composed exclusively of approximately 115-120 CEOs from the leading architectural, engineering and construction firms doing business in the United States.

CIRT is the only organization that is uniquely situated as a single voice representing the richly diverse and dynamic design/construction community. First organized in 1987 as the Construction Industry Presidents’ Forum, the Forum has since been incorporated as a not-for-profit association with the mission “to be a leading force for positive change in the design/construction industry while helping members improve the overall performance of their individual companies.”

The Round Table strives to create one voice to meet the interests and needs of the design/construction community. CIRT supports its members by actively representing the industry on public policy issues, by improving the image and presence of its leading members, and by providing a forum for enhancing and developing strong management approaches through networking and peer interaction.

The Round Table’s member CEOs serve as prime sources of information, news and background on the design/construction industry and its activities. If you are interested in obtaining more information about the Construction Industry Round Table, please call 202-466-6777 or contact us by email at cirt@cirt.org.

CIRT SENTIMENT INDEX

The CIRT Sentiment Index is a survey of members of the Construction Industry Round Table conducted quarterly by FMI Research, Raleigh, North Carolina. For press contact or questions about the CIRT Sentiment Index, contact Mark Casso at mcasso@cirt.org.

CONFIDENTIALITY

All individual responses to this survey will be confidential and shared outside of FMI only in the aggregate.
All names of individuals responding to this survey will remain confidential to FMI.

Brian Strawberry is a senior economist with FMI. Brian’s expertise is in economic and statistical modeling. He leads FMI’s efforts in market sizing, forecasting, and building product/construction material pricing and consumption trends. The combination of Brian’s analytical skills and creative problem-solving abilities has proven valuable for many contractors, owners and private equity groups as well as industry associations and internal research initiatives. Brian can be reached at bstrawberry@fminet.com.
Emily Beardall is a senior analyst for FMI’s strategy practice. Emily is responsible for creating and developing tools to deliver innovative solutions for our clients. She is committed to utilizing these strategic tools to improve company performance and profitability. Emily can be reached at ebeardall@fminet.com.