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 | Mar 15, 2018

ABC: Construction materials prices continue to expand briskly in February

Compared to February 2017, prices are up 5.2%.

Market Data | Mar 14, 2018

AGC: Tariff increases threaten to make many project unaffordable

Construction costs escalated in February, driven by price increases for a wide range of building materials, including steel and aluminum.

Market Data | Mar 12, 2018

Construction employers add 61,000 jobs in February and 254,000 over the year

Hourly earnings rise 3.3% as sector strives to draw in new workers.

Steel Buildings | Mar 9, 2018

New steel and aluminum tariffs will hurt construction firms by raising materials costs; potential trade war will dampen demand, says AGC of America

Independent studies suggest the construction industry could lose nearly 30,000 jobs as a result of administration's new tariffs as many firms will be forced to absorb increased costs.

Market Data | Mar 8, 2018

Prioritizing your marketing initiatives

It’s time to take a comprehensive look at your plans and figure out the best way to get from Point A to Point B.

Market Data | Mar 6, 2018

Persistent workforce shortages challenge commercial construction industry as U.S. building demands continue to grow

To increase jobsite efficiency and improve labor productivity, increasingly more builders are turning to alternative construction solutions.

Market Data | Mar 2, 2018

Nonresidential construction spending dips slightly in January

Private nonresidential construction fell 1.5% for the month, while public sector nonresidential spending increased 1.9%.

Market Data | Feb 27, 2018

AIA small firm report: Half of employees have ownership stake in their firm

The American Institute of Architects has released its first-ever Small Firm Compensation Report.

Market Data | Feb 21, 2018

Strong start for architecture billings in 2018

The American Institute of Architects reported the January 2018 ABI score was 54.7, up from a score of 52.8 in the previous month. 

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