The South posted the highest backlog in the history of the Construction Backlog Indicator (CBI) in the fourth quarter of 2015, according to Associated Builders and Contractors (ABC).
Nationally, backlog expanded by 2.7% to 8.7 months in the last three months of the year, with the South expanding on its previous record high reading by 8.7% to 11.19 months. In addition, infrastructure-related backlog expanded by 23.2% in the fourth quarter to 12.2 months.
"For the first time in years, some contractors are reporting that they are turning away work," ABC Chief Economist Anirban Basu said. "Skill-worker shortages are a frequently cited reason. The recent uptick in backlog suggests that demand for construction workers will remain elevated going forward, which will translate into faster wage growth, but also potentially rising costs and extended timelines.
"The nonresidential construction recovery remains very much in place," Basu said. "Despite disappointing news regarding global growth and corporate earnings, most contractors reported steady to rising backlog during 2015's final weeks. That's important to contractors, of course, but also to other economic stakeholders, since nonresidential construction spending growth has emerged as one of the nation's leading economic drivers.
"Nonresidential construction spending growth in January of 2016 was fully 12.3% its year-ago level," Basu said. "However, there were a number of months during the latter half of 2015 during which construction spending growth was soft. Accordingly, backlog expanded less rapidly during that period, including during the quarters that precede the fourth quarter's expansion."
For additional analysis click here.
Regional Highlights
- After a lull in backlog growth in Louisiana, several Louisiana contractors are reporting significant surges in backlog more recently. Louisiana is one of the nation's leading oil and natural gas suppliers. Some analysts have indicated that the state has been at risk of recession. But the ongoing expansion of the petrochemical sector as helped to rebuild backlog. Commercial activity has also begun to rebound in many communities.
- Backlog remains steady in the Northeast. The region has benefitted from stabilized federal government outlays, improving fiscal conditions in a handful of states and brisk commercial activity that is often linked to multifamily construction.
- Backlog in the West slipped during the year's initial quarter. There has been much speculation regarding excessively high technology company valuations. Many tech companies have expanded their physical capacity in recent years, and evidence suggests that this pace of expansion may have slowed somewhat. Still, backlog in the West remains above its level in the first half of 2015.
See Charts and Graphs.
Industry Highlights
- Backlog in the infrastructure category has reached an all-time high of 12.2 months. During the fourth quarter, backlog in this category increased by 2.3 months, a remarkable result and indicative of the quick impact of the newly passed federal highway spending bill – the first such bill to be passed in many years.
- Backlog in the heavy industrial category stands at 6.64 months, 6% lower than during the third quarter of 2015. This comes as little surprise as the nation's manufacturing sector sustained a 6% dip in exports last year. Additionally, the strong U.S. dollar has rendered imports more price competitive, suppressing domestic profit margins and construction.
- Backlog in the commercial/institutional category stands at more than 8 months. Backlog in this segment has stood at 8 months or better for 14 consecutive months, a reflection of the ongoing gradual economic recovery.
See Charts and Graphs.
Highlights by Company Size
- Backlog in the $30 million to $50 million annual revenue category now exceeds 12 months, the highest level in the history of this series. By contrast, average backlog during the fourth quarter of 2009 (six years ago) stood at 5.5 months.
- Backlog among the largest construction firms in the survey (+$100 million) expanded to 11.8 months during 2015's final quarter, the second highest level in the history of the series.
- Backlog in the $50 million to $100 million annual revenue category remains above 10 months and has been above that threshold during 12 of the last 14 quarters.
- Backlog among the smallest firms in the survey (>$30million) stood at 7.2 months during the four quarter, roughly the same as during the prior quarter. Backlog among this group of firms hardly changed over the course of 2015, though backlog presently is not as elevated on average as it was during in mid-2014.
See Charts and Graphs.
Related Stories
Resiliency | Sep 25, 2023
National Institute of Building Sciences, Fannie Mae release roadmap for resilience
The National Institute of Building Sciences and Fannie Mae have released the Resilience Incentivization Roadmap 2.0. The document is intended to guide mitigation investment to prepare for and respond to natural disasters.
Codes and Standards | Sep 25, 2023
Lendlease launches new protocol for Scope 3 carbon reduction
Lendlease unveiled a new protocol to monitor, measure, and disclose Scope 3 carbon emissions and called on built environment industry leaders to tackle this challenge.
Data Centers | Sep 21, 2023
North American data center construction rises 25% to record high in first half of 2023, driven by growth of artificial intelligence
CBRE’s latest North American Data Center Trends Report found there is 2,287.6 megawatts (MW) of data center supply currently under construction in primary markets, reaching a new all-time high with more than 70% already preleased.
Giants 400 | Sep 20, 2023
Top 80 Hospitality Facility Construction Firms for 2023
Suffolk Construction, The Yates Companies, STO Building Group, and PCL Construction Enterprises top BD+C's ranking of the nation's largest hospitality facilities sector contractors and construction management (CM) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report. Note: This ranking includes revenue for all hospitality facilities work, including casinos, hotels, and resorts.
Giants 400 | Sep 18, 2023
Top 120 Office Building Construction Firms for 2023
Turner Construction, STO Building Group, AECOM, and DPR Construction top BD+C's ranking of the nation's largest office building sector contractors and construction management (CM) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report. Note: This ranking includes revenue for all office building work, including core and shell projects and workplace/interior fitouts.
Adaptive Reuse | Sep 15, 2023
Salt Lake City’s Frank E. Moss U.S. Courthouse will transform into a modern workplace for federal agencies
In downtown Salt Lake City, the Frank E. Moss U.S. Courthouse is being transformed into a modern workplace for about a dozen federal agencies. By providing offices for agencies previously housed elsewhere, the adaptive reuse project is expected to realize an annual savings for the federal government of up to $6 million in lease costs.
Data Centers | Sep 15, 2023
Power constraints are restricting data center market growth
There is record global demand for new data centers, but availability of power is hampering market growth. That’s one of the key findings from a new CBRE report: Global Data Center Trends 2023.
Engineers | Sep 15, 2023
NIST investigation of Champlain Towers South collapse indicates no sinkhole
Investigators from the National Institute of Standards and Technology (NIST) say they have found no evidence of underground voids on the site of the Champlain Towers South collapse, according to a new NIST report. The team of investigators have studied the site’s subsurface conditions to determine if sinkholes or excessive settling of the pile foundations might have caused the collapse.
Office Buildings | Sep 14, 2023
New York office revamp by Kohn Pedersen Fox features new façade raising occupant comfort, reducing energy use
The modernization of a mid-century Midtown Manhattan office tower features a new façade intended to improve occupant comfort and reduce energy consumption. The building, at 666 Fifth Avenue, was originally designed by Carson & Lundin. First opened in November 1957 when it was considered cutting-edge, the original façade of the 500-foot-tall modernist skyscraper was highly inefficient by today’s energy efficiency standards.
Healthcare Facilities | Sep 13, 2023
Florida’s first freestanding academic medical behavioral health hospital breaks ground in Tampa Bay
Construction kicked off recently on TGH Behavioral Health Hospital, Florida’s first freestanding academic medical behavioral health hospital. The joint venture partnership between Tampa General (a 1,040-bed facility) and Lifepoint Behavioral Health will provide a full range of inpatient and outpatient care in specialized units for pediatrics, adolescents, adults, and geriatrics, and fills a glaring medical need in the area.
