According to Associated Builders and Contractors (ABC), the Construction Backlog Indicator (CBI) for the fourth quarter of 2014 declined 0.1 months, or 1%. Despite the quarter-over-quarter decline, backlog ended the year at 8.7 months, which is still 4.4% higher than one year ago.
"Inconsistent growth in the volume of public work continues to suppress the pace of nonresidential construction; however, private construction momentum continues to build," said ABC Chief Economist Anirban Basu. "With hotel occupancy rising, office vacancy falling and demand for data climbing exponentially, a number of key private segments are positioned for rapid growth in construction spending this year.
"There are a number of factors that are likely to be beneficial to nonresidential contractors in 2015," said Basu. "First, although interest rates were expected to rise after the Federal Reserve ended its third round of quantitative easing, they have actually been trending lower—due to factors such as falling interest rates abroad and a strengthening U.S. dollar—which helps contractors with construction volume and borrowing costs. Second, materials prices have continued to fall—particularly inputs related to the price of oil, iron ore and copper. This also makes it more likely that construction projects will move forward and helps boost profit margins."
Regional Highlights
• Average backlog in the South is back above 9 months for the first time since the first quarter of 2014.
• Though backlog in the West fell sharply during 2014's final quarter, average backlog remains comparable to where it was a year ago.
• Both the Northeast and the Middle States registered levels of average backlog unseen during the history of the CBI survey.
Industry Highlights
• Average backlog in the commercial and institutional category is virtually unchanged over the past year, suggesting the pace of recovery will remain moderate overall.
• Infrastructure-related spending is likely to be brisk going forward primarily due to improved state and local government fiscal conditions.
• Heavy industrial average backlog remains in the vicinity of multi-year highs, but these readings do not fully reflect the impact of a stronger U.S. dollar, which may result in a slowdown in export growth and an associated softening in industrial investment.
Highlights by Company Size
• During the fourth quarter, backlog expanded for mid-sized companies with annual revenue ranging between $30 million-$100 million. These firms enjoyed approximately half a month expansion in their respective average backlogs during the fourth quarter.
• On the other hand, backlog for small firms (annual revenue less than $30 million) and very large firms (annual revenue greater than $100 million) declined 0.2 months and 0.5 months, respectively.
• Large firms appear to have been impacted by a slowdown in large project infrastructure spending in certain parts of the country, while smaller firms have been impacted by greater observed difficulty in obtaining bonding for projects in the context of accelerating small firm failure.
• Average backlog has increased by nearly three months or by more than three months for all firm size categories since the fourth quarter of 2009.
Related Stories
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.
Giants 400 | Sep 12, 2023
Top 80 Retail Sector Contractors and Construction Management Firms for 2023
Whiting-Turner, ARCO Construction, Swinerton, and PCL top BD+C's ranking of the nation's largest retail building contractors and construction management (CM) firms for 2023, as reported in the 2023 Giants 400 Report. Note: This ranking factors revenue for all retail buildings work, including big box stores, cineplexes, entertainment centers, malls, restaurants, strip centers, and theme parks.
