Construction / Contractor Industry Confidence Rebounds 11 Points to 42.04 as Owners, Managers Project Greater Optimism in Economy

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Improved revenues forecasted; General economy, cost of materials, interest rates three top concerns, according to latest IPA SBRB Study.

Owners and managers of small to medium sized construction and contracting firms are decidedly more optimistic for their industry's prospects during the next 12 months, rebounding from their sour mid 2006 projections.

According to the latest IPA Small Business Research Board (IPA SBRB) nationwide poll of the construction and contracting industry, the Small Business Confidence Index (SBCI) for the sector jumped 11.34 points to 42.04 from a low point of 30.7 recorded last August. The rebound brought the construction and contracting category to within a fraction of the overall SBCI of 42.7 reported during the most recent poll - indicating that their confidence in the future is nearly on par with the average of all small businesses in the US.

The IPA SBRB Construction / Contractor Confidence Index of 42.04 is still shy of its high point of 49.3 that was recorded during the spring of 2006. That poll was the first segmented IPA SBRB study of the construction and contracting industry.

While there have been swings in confidence all measured categories, none have been as wide as the reported swing in the construction and contractor industry.

The current rebound can be directly attributed to the opinions that owners and managers have about the future for the economy as well as expectations for higher revenues. There is nearly a direct corollary in the change in opinion on the economy, with 37.5% of the respondents indicating they expect improvement or 11.5% higher than the 26% who had the same opinion as reported in the previous study.

Furthermore, 64% of the current respondents believe their revenues are headed higher, with a full 50% believing their business revenues will be more than 10% greater than current levels over the next 12 months. By contrast, only 40% projected higher revenues in the summer study, with 22% of those forecasting revenue increases of 10% or greater.

The IPA SBRB has been tracking the attitudes of small businesses since July 2004. The key ingredients for determining the confidence index are attitudes about the direction of the economy, revenue predictions and hiring plans.

Of the respondents, 24.6% said they intend to increase their current workforce levels, a slight decline for the 26% who had the same opinion in the previous study.

"It is clear that small businesses within the construction and contracting industry have great expectations as we enter 2007. The reality of what occurs in this sector is an economic bellweather. Positive improvement should bode well for nearly every other small business," said Gregg Steinberg, President of International Profit Associates, the largest privately-held provider of management consulting and professional services to small and medium-size businesses in North America.

"Regardless of the forecast, we can expect the construction and contracting firms to maintain a tight reign on expenses, including the resistance to add to their workforce," said Steinberg.

Of all categories measured, the construction and contracting sector was the only one that ranked reduction of expenses as their leading priority for 2007. While a critical eye will be kept on swings in the economy, the construction and contracting firms will take aggressive measures to manage the cost of materials and react to fluctuations in interest rates. The general economy, cost of materials and interest rates are the greatest current concerns.

The International Profit Associates Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations.

The IPA SBRB research includes studies of specific industry segments, such as Construction & Contracting, Manufacturing. Transportation and Food Services. The IPA Small Business Research Board will continue to expand upon the base of industries it tracks.

Participants in IPA SBRB polls provide feedback on significant issues and allow for real-time insight into the state of small businesses nationwide. The universe of participants is developed from among small businesses across the United States. IPA SBRB studies are voluntary surveys conducted via phone and email. Polls are structured and supervised through an independent resource.

The latest information about the IPA Small Business Research Board can be found at http://www.ipasbrb.com/. Complete results of this study can be found at:

http://www.ipasbrb.com/construction-industry-confidence.htm

or at:

http://www.biznus.net/construction-industry-confidence.htm

International Profit Associates, Inc. (IPA) is the largest privately held provider of management consulting services to small and medium-sized businesses in North America. IPA and its more than 1,800 professionals offer a wide range of proven and innovative methodologies to help businesses grow and prosper regardless of the economic cycle.

IPA either provides directly or through its affiliated companies a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the United States and Canada. More information about IPA can be found at http://www.ipa-iba.com/.

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Raymond Minkus
IPA SBRB
(847) 441-4294
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