Construction Barometer™ > Previous Quarter Results

News Release - 2nd Quarter 2002

Fall Results 2002 (Based on Second Quarter 2002)

Carolinas AGC Construction Barometer™ Moves Up 5.9% Seasonal Factors Power The Increase

 CHARLOTTE, October 22, 2002 – The Carolinas AGC Construction Barometer™ posted a 5.9% increase during the second quarter of 2002, rebounding to 2001 year-end levels after a dip in first quarter 2002. The increase came primarily on a major improvement in the quantitative Business and Economic Trends category. This indicator, down 21.5% in first quarter 2002, increased 36.9% in second quarter 2002. It’s rare for any individual Barometer value to whipsaw so dramatically from quarter-to-quarter. A large increase in North Carolina highway letting as well as the seasonal spring surge in construction volume drove the increase in this component.

"The lowest interest rates in 40 years and seasonal increases in construction activity combined for the improvement in the Barometer, but these numbers are masking the underlying patterns of slow economic growth, unemployment and uncertainty," says Tony Plath, UNCC associate professor of finance and developer of the Carolinas AGC Barometer. "Any sort of substantive improvement in business conditions in the regional commercial construction industry is going to take some time – at least well into 2003."

Employment and Labor Trends, such as unemployment and wage rates, remained relatively stable, as did financing indicators like interest rates. Contractor sentiment remains somewhat bearish in terms of employment and labor, as well as business and economic trends.

The improvement was seen geographically, quantitatively and qualitatively. South Carolina, which dipped 8.9% in first quarter 2002, experienced an 8.1% rise this quarter. Down 3.8% in first quarter 2002, North Carolina rebounded 4.9% in second quarter 2002. All five economic regions in the two-state area showed increases in regional indices. Rural regions have bounced back more quickly than the more urban regions of the two states. The largest percentage increase was seen in Low Country, SC (up 15.9%), followed by Eastern NC (up 12.4%).

Additionally, the Barometer showed increases in the Qualitative Series (up 0.9%) as well as the Quantitative Series (up 11.0%).

State-By-State Overview

The North Carolina Barometer rose 4.9% from first quarter to second quarter 2002, slightly above the 2001 year-end figure. Seasonal surges in highway letting and construction volume were responsible for much of the increase.

The rural Eastern NC region led the way with a 12.4% increase, followed by Western NC with a 10.7% positive move. The more urbanized Heartland NC region lagged behind with a 2.0% increase. This was due in large part to a 23.1% decrease in the Heartland’s quantitative Employment and Labor Trends. South Carolina’s Barometer rose 8.1% in second quarter 2002, regaining most of the ground it lost in first quarter 2002. Highway letting actually slipped a bit in South Carolina, but the spring seasonal spike in construction volume increased appreciably.

As in North Carolina, the more rural region of South Carolina experienced the most significant positive move. Low Country SC’s index was up 15.9% on major increases in both the Employment and Labor and Business and Economic trends quantitative components, as well as increases in the qualitative Business and Economic and Financing components. Upstate SC made a more modest 5.1% move to the upside.

As the largest AGC chapter in the US with 3,300 member firms, Carolinas AGC builds its members’ businesses through workforce development, business development, profit management, and a self-insured workers’ compensation trust. More than 75% of commercial/industrial work (buildings, highways, utility facilities) in the Carolinas is performed or supported by CAGC members.