Associated Builders and Contractors' (ABC) Construction Backlog Indicator (CBI) expanded by 1% to 8.5 months during the 2nd quarter of 2015. Backlog declined 3% during the 1st quarter, which was punctuated by harsh winter weather and the lingering effects of the West Coast ports slowdown. CBI stands roughly where it did a year ago, indicative of an ongoing recovery in the nation's nonresidential construction industry.
"The nation's nonresidential construction industry is now one of America's leading engines of growth," said ABC Chief Economist Anirban Basu. "The broader U.S. economic recovery is now in its 74th month, but remains under-diversified, led primarily by a combination of consumer spending growth as well as residential and nonresidential construction recovery. Were the overall economy in better shape, the performance of nonresidential construction would not be as closely watched. The economic recovery remains fragile despite a solid GDP growth figure for the second quarter, and must at some point negotiate an interest-rate tightening cycle. Recent stock market volatility has served to remind all stakeholders how delicate the economic recovery continues to be."
Regional Highlights
- The West experienced a significant expansion in backlog, rising 1.2 months following the resolution of the West Coast port slowdown, however backlog in the region remains nearly 2.5 months below its year-ago levels, the largest drop of any region.
- Backlog in the South has essentially returned to where it was two years ago, in part because of a slowdown in energy-related investment. The implication is that the average contractor remains busy, but boom-like conditions no longer prevail in energy-intensive communities.
- Despite this, backlog in the South continue to hold the longest average construction backlog.
- Backlog slipped for a second consecutive quarter in the Northeast, but remains above levels registered during the second half of 2013.
- See charts and graphs here.
Industry Highlights
- Backlog in the heavy industrial segment has never been higher during the length of the series, penetrating the seven-month mark for the first time. This represents an increase of more than two months in average backlog over the past two years. Average backlog was below five months during 2013's second half.
- Industrial backlog has continued to rise despite the strength of the U.S. dollar, which has contributed to limited export growth.
- Commercial/institutional backlog has remained above eight months on average for twelve consecutive quarters, a reflection of America's steady rate of employment expansion.
- Backlog for all industry segments is higher on a year-over-year basis with exception of the commercial/institutional segment. Commercial/institution construction segments have been among the most active from a construction spending perspective in recent years. Therefore, the small adjustment in average backlog is not particularly worrisome.
- See charts and graphs here.
Highlights by Company Size
- On a quarterly basis, backlog rose or remained flat across all firm sizes.
- Average construction backlog is higher or roughly the same as year-ago levels for firms of all size categories with the exception of a half-month drop in backlog among firms generating $100 million or more in annual revenues.
- The largest firms, however, continue to have the lengthiest average backlog at 10.7 months.
- See charts and graphs here.
Related Stories
Multifamily Housing | Mar 12, 2015
Multifamily construction has been a boon to L.A.’s economy
A new study finds that nearly one-quarter of Los Angeles’ population lived in rental homes and apartments in 2013, a number that undoubtedly has increased since.
BIM and Information Technology | Mar 11, 2015
Google plans to use robots, cranes to manipulate modular offices at its new HQ
Its visions of “crabots” accentuate the search-engine giant’s recent fascination with robotics and automation.
Sports and Recreational Facilities | Mar 11, 2015
Foster + Partners wins bid for 2022 World Cup centerpiece stadium in Qatar
Norman Foster described the design as “an exciting step forward in stadium design—it will be the first to break the mold of the free-standing suburban concept, and instead anticipates the grid of this future city.”
Modular Building | Mar 10, 2015
Must see: 57-story modular skyscraper was completed in 19 days
After erecting the mega prefab tower in Changsha, China, modular builder BSB stated, “three floors in a day is China’s new normal.”
Sponsored | Metals | Mar 10, 2015
Metal Building Systems: A Rising Star in the Market
A new report by the Metal Building Manufacturer's Association explains the entity's efforts in refining and extending metal building systems as a construction choice.
Museums | Mar 9, 2015
Architecture based on astronomy principles for new planetarium in Shanghai
The ancient Chinese civilization left some of the earliest records of humans studying the stars and skies. To exhibit this long history, a new planetarium and astronomy museum is planned for construction in Shanghai.
Office Buildings | Mar 7, 2015
Chance encounters in workplace design: The winning ticket to the innovation lottery?
The logic behind the push to cultivate chance encounters supposes that innovation is akin to a lottery. But do chance encounters reliably and consistently yield anything of substance?
Justice Facilities | Mar 5, 2015
New courthouse blossoms into a civic space for one California town
The building's canopy suggests classical courthouse features of front porch and portico. It also helps connect the building with a public plaza that has re-centered civic activity and public gathering for the town.
Justice Facilities | Mar 5, 2015
State of the state: How state governments are funding construction projects
State budget shortfalls are making new construction and renovation projects a tough sell, leading lawmakers to seek alternative funding for these jobs.
Museums | Mar 5, 2015
A giant, silver loop in Dubai will house the Museum of the Future
The Sheikh of Dubai hopes the $136 million museum will serve as an incubator for ideas and real designs—a global destination for inventors and entrepreneurs.