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 | Dec 2, 2020

Nonresidential construction spending remains flat in October

Residential construction expands as many commercial projects languish.

Market Data | Nov 30, 2020

New FEMA study projects implementing I-Codes could save $600 billion by 2060

International Code Council and FLASH celebrate the most comprehensive study conducted around hazard-resilient building codes to-date.  

Market Data | Nov 23, 2020

Construction employment is down in three-fourths of states since February

This news comes even after 36 states added construction jobs in October.

Market Data | Nov 18, 2020

Architecture billings remained stalled in October

The pace of decline during October remained at about the same level as in September.

Market Data | Nov 17, 2020

Architects face data, culture gaps in fighting climate change

New study outlines how building product manufacturers can best support architects in climate action.

Market Data | Nov 10, 2020

Construction association ready to work with president-elect Biden to prepare significant new infrastructure and recovery measures

Incoming president and congress should focus on enacting measures to rebuild infrastructure and revive the economy.

Market Data | Nov 9, 2020

Construction sector adds 84,000 workers in October

A growing number of project cancellations risks undermining future industry job gains.

Market Data | Nov 4, 2020

Drop in nonresidential construction offsets most residential spending gains as growing number of contractors report cancelled projects

Association officials warn that demand for nonresidential construction will slide further without new federal relief measures.

Market Data | Nov 2, 2020

Nonresidential construction spending declines further in September

Among the sixteen nonresidential subcategories, thirteen were down on a monthly basis.

Market Data | Nov 2, 2020

A white paper assesses seniors’ access to livable communities

The Joint Center for Housing Studies and AARP’s Public Policy Institute connect livability with income, race, and housing costs.

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