2018 Building Supply Index shows dwindling contractor confidence in economy
Index reveals more uncertainty with first year-over-year decline since 2016
BlueTarp Financial, a leading credit management company for B2B suppliers, released its Q4 2018 Building Supply Index. The Q4 2018 seasonally unadjusted average declined from 131.39 in 2017 to 130.73 the first year-over-year slowdown since Q2 2016.
The decline was driven by a drop in consumer confidence that peaked at 137.9 in October, the highest in nearly two decades, but saw a dip to 128.1 in December.
BlueTarp’s supplemental survey revealed that contractor’s confidence in the future health of the economy continues to waver. Nearly 30% think that the next 12 months will decline in some way. Only 40% of contractors think the economy would improve, a 20% decrease from last quarter. Contractors revealed more uncertainty caused by rising tariffs, interest rates, and trade issues.
“Q4 gave many a reason to pause. The equity markets tumbled from October levels and the partial government shutdown took their toll on consumer confidence. Our contractor survey also reflected greater concerns,” said Scott Simpson, CEO of BlueTarp. “The equity markets have recovered somewhat in Q1 which may slow pessimism piling up on top of pessimism.”
To interpret the Index, values below 100 reflect recessionary or recovering performance. Values above 100 reflect healthy economic activity.
The report represents trends from 120,000 pro customers and over 1,000 active building material suppliers across the United States. It also incorporates macro-economic drivers including building permits, construction spend, and consumer confidence as reported monthly by the Census Bureau and The Conference Board.