For many in the industry, the construction market seems to have stabilized and is beginning to show signs of life. However, there are concerns among owners, both public and private, about the availability of funds to launch new capital programs. So the construction industry believes that any significant rebound will not come until 2013.

The most recent ENR Construction Industry Confidence Index survey shows the industry's guarded optimism. The second-quarter 2012 CICI fell two points from the first quarter to 56 on a scale of 100. (A CICI rating of 50 would represent a stable market.) The 449 executives of large construction and design firms responding to the survey believe the market has stopped falling and is showing signs of growth.

The CICI measures executive sentiment about the current market and reflects their views on where it will be in the next three to six months and over a 12- to 18-month period. The index is based on responses to surveys sent out to more than 3,000 U.S. firms on ENR's lists of the leading contractors, subcontractors and design firms. The latest results are based on a survey conducted from May 24 to June 11.

The CICI also measures sentiment about the U.S. economy, a leading indicator of future construction trends. In the second quarter, confidence in the U.S. economy fell to a CICI rating of 55, from 64 in the last quarter. This rating marks the first time that CICI repondents' confidence in the overall economy was lower than their confidence in the market.

There is still a great deal of uncertainty regarding the current market. Recent pessimistic reports about the economy, including an unexpected rise in the unemployment rate, have given owners pause, according to some respondents. "Our markets are tending to improve, but I think the general economy will not," says an executive at one large Midwestern specialty contractor.

Many respondents say that some projects are on hold, pending the results of this year's presidential election, when there will be more certainty about the direction Washington will take. "It's a presidential election year. Not much will change until 2013," says an exec at a mid-size engineer-contractor in the South.

As for the current market, slightly more respondents (24%) believe it is still in decline; however, 21% believe it is growing. But 29% believe the market will be growing by the end of the year, compared to the 20% who believe it will still be in decline.

The industry's expectations for the market in 2013 remain high. Only 8% of respondents believe the market will continue to be in decline in 12 to 18 months, while 57% say it will be improving.

CFMA Survey: CFOs Wary

The CICI findings parallel the soon-to-be-released results of the latest Confindex survey from the Construction Financial Management Association, Princeton, N.J. CFMA polls 200 CFOs from general contractors, subcontractors and civil contractors. (A Confindex rating of 100 indicates a stable market.) Higher ratings show growth is expected.

"Our Confindex rose fell from 126 to 124 [on a scale of 200] for the second quarter," says Stuart Binstock, CEO of CFMA. In the first quarter of 2011, the Confindex hit 131.