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
| May 24, 2012
Construction backlog declines 5.4% in the first quarter of 2012?
The nation’s nonresidential construction activity will remain soft during the summer months, with flat to declining nonresidential construction spending.
| May 24, 2012
Stellar completes St. Mark’s Episcopal Church and Day School renovation and expansion
The project united the school campus and church campus including a 1,200-sf chapel expansion, a new 10,000-sf commons building, 7,400-sf of new covered walkways, and a drop-off pavilion.
| May 23, 2012
MBI Modular Construction Campus Launched on BDCUniversity.com
White Papers, Case Studies, Industry Annual Reports, published articles and more are offered.
| May 23, 2012
Gifford joins Perkins Eastman as principal
Design and planning expertise in science, technology, education, and healthcare.
| May 23, 2012
McRitchie joins McCarthy Building as VP, commercial services in southern California
McRitchie brings more than 18 years of experience in the California construction marketplace.
| May 23, 2012
Arizona Army National Guard Readiness Center awarded LEED Silver
LEED certification of the AZ ARNG Readiness Center was based on a number of green design and construction features SAIC implemented that positively impacted the project and the broader community.
| May 23, 2012
New hospitals invest in data centers to manage growth in patient info
Silver Cross became one of the first hospitals to install patient tracking software so families know where a patient is at all times. New communication equipment supports wireless voice and data networks throughout the hospital, providing access to patients and their families while freeing clinicians to use phones and computers where needed instead of based on location.
| May 23, 2012
Summit Design+Build selected as GC for Chicago restaurant
Little Goat will truly be a multifunctional space. Construction plans include stripping the 10,000 sq. ft. building down to the bare structure everywhere, the installation of a new custom elevator and adding square footage at the second floor with an addition.
| May 22, 2012
Batson-Cook names Partin VP of Business Development
Partin joins general contractor from Georgia Hospital Association.