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 | Jun 30, 2020

329 metro areas added construction jobs in May

Seattle-Bellevue-Everett, Wash. added the most construction jobs (28,600, 44%) in May.

Market Data | Jun 29, 2020

6 must reads for the AEC industry today: June 29, 2020

HQ tower features gardens on every floor and the head of Hilton talks about how his business will survive.

Market Data | Jun 26, 2020

5 must reads for the AEC industry today: June 26, 2020

Restoration of 1930s El Paso hotel completes and Arc offers tools, analytics for safe workplace re-entry.

Market Data | Jun 25, 2020

Commercial Construction Index drops amid Coronavirus pandemic, but contractors poised for near-term recovery

Contractors quickly prioritized worker health and safety, and 1 in 3 plan to hire more workers in the next 6 months.

Market Data | Jun 25, 2020

7 must reads for the AEC industry today: June 25, 2020

CDC to build the most advanced high containment laboratory in the country and architecture billings downward trajectory moderates.

Market Data | Jun 24, 2020

Architecture billings downward trajectory moderates

AIA’s Architecture Billings Index (ABI) score for May was 32.0 compared to 29.5 in April, but still represents a significant decrease in services provided by U.S. architecture firms.

Market Data | Jun 24, 2020

8 must reads for the AEC industry today: June 24, 2020

San Francisco's apartment market goes in reverse and WATG designs a solution for isolating without sacrificing social connectivity.

Market Data | Jun 23, 2020

National survey reveals pandemic's impact on college students' mental health, remote learning, families' income and more

Of 2,500 student respondents, 75% feel more anxious or stressed, 57% said they lost their summer jobs and 90% want to return to campus in the fall.

Market Data | Jun 23, 2020

7 must reads for the AEC industry today: June 23, 2020

Gyms are going bacnkrupt and leaving gaps in shopping centers and how hotels are trying to keep guests and employees safe.

Market Data | Jun 22, 2020

New House infrastructure package will provide needed investments in aging infrastructure, support economic recovery, and create jobs

The Moving Forward Act’s proposed $1.5 trillion in new investments will improve range of public infrastructure, creating needed demand for construction while making the economy more efficient.

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