Credit Remains a Concern for Many Contractors

According to a Reuters article many contractors find construction financing difficult to come by.  The Construction Industry Confidence Index, published by Engineering News-Record magazine, found that 39 percent of contractors and engineering companies say project financing is harder to obtain than in the first quarter of 2010, whereas only 13 percent found financing easier to obtain.  Despite these credit woes, half of all industry firms surveyed believe the market will improve in the next twelve to eighteen months.  The Confidence Index increased by seven points overall in the second quarter, but is still below its indicator for an expanding market.  The Architecture Billings Index is also below its indicator for expansion, according to Reuters.  The Index fell two points in May, also citing tight credit problems as a reason why the Index has not yet stabilized.  According to the AIA's Chief Economist Kermit Baker, this dip comes as a surprise and is likely attributable to an "unusual caution on the part of lending institutions," echoing the concern found in the McGraw-Hill survey.  Though both indeces are below their indicators for market growth, it is important to note that both the Billings Index and the Confidence Index have been following upward trends since the beginning of the year.