flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

ABC’s Construction Backlog Indicator falls in April; Contractor Confidence rebounds from historic lows

Market Data

ABC’s Construction Backlog Indicator falls in April; Contractor Confidence rebounds from historic lows

Nonresidential construction backlog is down 0.4 months compared to the March 2020 ABC survey and 1.7 months from April 2019.


By ABC | May 12, 2020

Associated Builders and Contractors reported today that its Construction Backlog Indicator fell to 7.8 months in April, the series’ lowest reading since the third quarter of 2012. Based on an ABC member survey conducted April 20-May 4, the results indicate that confidence among U.S. construction industry leaders inched higher last month compared to the historically low levels observed in the March survey.

Nonresidential construction backlog is down 0.4 months compared to the March 2020 ABC survey and 1.7 months from April 2019. Backlog has declined year-over-year in every industry classification, region and company size. Backlog in the infrastructure category has been stable, however, and reached its highest level since December 2019.

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels expectations all increased from the historically low levels reported in the March 2020 survey, although sales and profit margin expectations remain below the threshold of 50, indicating ongoing expectations of contraction. The staffing level index rose to 51.4 in April, however, indicating positive hiring expectations over the next six months.

 

 

More than 55% of contractors expect their sales to decline over the next six months compared to just 34% who expect them to increase. Only 27% of contractors expect to increase their profit margins over the next two quarters. More than half expect to experience diminished margins.

  • The CCI for sales expectations increased from 38.1 to 41.1 in April.
  • The CCI for profit margin expectations increased from 36.6 to 39.8.
  • The CCI for staffing levels increased from 45.2 to 51.4.

 

 

“Backlog has not been quite the protective shield that it normally is during the early stages of an economic downturn,” said ABC Chief Economist Anirban Basu. “These survey data indicate that only 30% of nonresidential contractors have enjoyed uninterrupted work flows recently. Roughly two in five contractors indicate that their work has been interrupted by government mandate. Other sources of interruption to construction projects include labor force issues as well as a lack of personal protective equipment and/or key construction inputs.

“Given the large quantity of businesses that will likely not survive the public health and economic crisis, demand for construction services could be suppressed for quite some time,” said Basu. “Vacant storefronts, empty office suites and shattered state and local government finances do not serve as a solid foundation for robust demand for construction services. For construction activity to rebound briskly, the federal government is going to have to step forward and provide substantial assistance to state and local governments, including to finance infrastructure improvements.” 

 

 


 

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12 to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.

Related Stories

Market Data | Nov 30, 2016

Marcum Commercial Construction Index reports industry outlook has shifted; more change expected

Overall nonresidential construction spending in September totaled $690.5 billion, down a slight 0.7 percent from a year earlier.

Industry Research | Nov 30, 2016

Multifamily millennials: Here is what millennial renters want in 2017

It’s all about technology and convenience when it comes to the things millennial renters value most in a multifamily facility.

Market Data | Nov 29, 2016

It’s not just traditional infrastructure that requires investment

A national survey finds strong support for essential community buildings.

Industry Research | Nov 28, 2016

Building America: The Merit Shop Scorecard

ABC releases state rankings on policies affecting construction industry.

Multifamily Housing | Nov 28, 2016

Axiometrics predicts apartment deliveries will peak by mid 2017

New York is projected to lead the nation next year, thanks to construction delays in 2016

Market Data | Nov 22, 2016

Construction activity will slow next year: JLL

Risk, labor, and technology are impacting what gets built.

Market Data | Nov 17, 2016

Architecture Billings Index rebounds after two down months

Decline in new design contracts suggests volatility in design activity to persist.

Market Data | Nov 11, 2016

Brand marketing: Why the B2B world needs to embrace consumers

The relevance of brand recognition has always been debatable in the B2B universe. With notable exceptions like BASF, few manufacturers or industry groups see value in generating top-of-mind awareness for their products and services with consumers.

Industry Research | Nov 8, 2016

Austin, Texas wins ‘Top City’ in the Emerging Trends in Real Estate outlook

Austin was followed on the list by Dallas/Fort Worth, Texas and Portland, Ore.

Market Data | Nov 2, 2016

Nonresidential construction spending down in September, but August data upwardly revised

The government revised the August nonresidential construction spending estimate from $686.6 billion to $696.6 billion.

boombox1
boombox2
native1

More In Category




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021