For about fifteen years, I've been a writing consultant for the Corporate world. In business writing, contraction use is frowned upon because it sounds too informal. But it's that very informality that makes using them a requirement in pleasure reading/writing. In dialog as well as prose, the contraction gives the reader a sense that the characters are real, rather than one dimensional creatures built of words sitting on a page.
Real people speak in contractions. Heck, in today's world, real people speak in digital shorthand and acronyms! But we don't need to go quite that far to make our characters feel real. To illustrate my point, here's a section from my most recent release, Honeybun Sheik, without contractions:
See how robotic their dialog sounds? Real people just don't talk, or think, like this. It's a small detail but often it's the small things that make the difference between effective writing and clunky prose. I should point out that there is one exception to this rule. When you have a non-English speaking character, like, in this case Abdel, who is from the Middle East, speaking English, the lack of contractions is a handy way to illustrate the fact that English is being spoken as a second language. But even then you want to limit your use of this tool, or you risk having distractingly robotic character interchanges.