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
Market Data | Jan 10, 2023
Construction backlogs at highest level since Q2 2019, says ABC
Associated Builders and Contractors reports today that its Construction Backlog Indicator remained unchanged at 9.2 months in December 2022, according to an ABC member survey conducted Dec. 20, 2022, to Jan. 5, 2023. The reading is one month higher than in December 2021.
Religious Facilities | Jan 9, 2023
Santiago Calatrava-designed St. Nicholas Greek Orthodox Church opens in New York
In December, New York saw the reopening of the new St. Nicholas Greek Orthodox Church and National Shrine—the only religious structure destroyed on 9/11. Renowned architect and engineer Santiago Calatrava designed St. Nicholas Church to address the traditional Greek Orthodox liturgy while honoring the Church’s connection with the World Trade Center Memorial site.
Sustainability | Jan 9, 2023
Innovative solutions emerge to address New York’s new greenhouse gas law
New York City’s Local Law 97, an ambitious climate plan that includes fines for owners of large buildings that don’t significantly reduce carbon emissions, has spawned innovations to address the law’s provisions.
Fire and Life Safety | Jan 9, 2023
Why lithium-ion batteries pose fire safety concerns for buildings
Lithium-ion batteries have become the dominant technology in phones, laptops, scooters, electric bikes, electric vehicles, and large-scale battery energy storage facilities. Here’s what you need to know about the fire safety concerns they pose for building owners and occupants.
Market Data | Jan 6, 2023
Nonresidential construction spending rises in November 2022
Spending on nonresidential construction work in the U.S. was up 0.9% in November versus the previous month, and 11.8% versus the previous year, according to the U.S. Census Bureau.
Industry Research | Dec 28, 2022
Following a strong year, design and construction firms view 2023 cautiously
The economy and inflation are the biggest concerns for U.S. architecture, construction, and engineering firms in 2023, according to a recent survey of AEC professionals by the editors of Building Design+Construction.
Contractors | Dec 27, 2022
McHugh Construction, headquartered in Chicago, celebrates its 125th anniversary
McHugh Construction, Chicago, celebrates its 125th anniversary, December 8, 2022.
University Buildings | Dec 22, 2022
Loyola Marymount University completes a new home for its acclaimed School of Film and Television
California’s Loyola Marymount University (LMU) has completed two new buildings for arts and media education at its Westchester campus. Designed by Skidmore, Owings & Merrill (SOM), the Howard B. Fitzpatrick Pavilion is the new home of the undergraduate School of Film and Television, which is consistently ranked among the nation’s top 10 film schools. Also designed by SOM, the open-air Drollinger Family Stage is an outdoor lecture and performance space.
Adaptive Reuse | Dec 21, 2022
University of Pittsburgh reinvents century-old Model-T building as a life sciences research facility
After opening earlier this year, The Assembly recently achieved LEED Gold certification, aligning with the school’s and community’s larger sustainability efforts.
Multifamily Housing | Dec 20, 2022
Brooks + Scarpa-designed apartment provides affordable housing to young people aging out of support facilities
In Venice, Calif., the recently completed Rose Apartments provides affordable housing to young people who age out of youth facilities and often end up living on the street. Designed by Brooks + Scarpa, the four-story, 35-unit mixed-use apartment building will house transitional aged youths.
