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 | May 20, 2020

Architecture billings continue historic contraction

AIA’s Architecture Billings Index (ABI) score of 29.5 for April reflects a decrease in design services provided by U.S. architecture firms.

Market Data | May 19, 2020

5 must reads for the AEC industry today: May 19, 2020

Clemson's new mass timber building and empty hotels as an answer for the affordable housing shortage.

Market Data | May 18, 2020

5 must reads for the AEC industry today: May 18, 2020

California's grid can support all-electric buildings and you'll miss your office when it's gone.

Market Data | May 15, 2020

6 must reads for the AEC industry today: May 15, 2020

Nonresidential construction employment sees record loss and Twitter will keep all of its office space.

Market Data | May 15, 2020

Nonresidential construction employment sees record loss in April

The construction unemployment rate was 16.6% in April, up 11.9 percentage points from the same time last year.

Market Data | May 14, 2020

5 must reads for the AEC industry today: May 14, 2020

The good news about rent might not be so good and some hotel developers consider whether to abandon projects.

Market Data | May 13, 2020

House democrats' coronavirus measure provides some relief for contractors, but lacks other steps needed to help construction

Construction official says new highway funding, employee retention credits and pension relief will help, but lack of safe harbor measure, Eextension of unemployment bonus will undermine recovery.

Market Data | May 13, 2020

5 must reads for the AEC industry today: May 13, 2020

How to design resilient libraries in a post-covid world and vacation real-estate markets are 'toast.'

Market Data | May 12, 2020

6 must reads for the AEC industry today: May 12, 2020

A 13-point plan to reduce coronavirus deaths in nursing homes and Bjarke Ingels discusses building on Mars.

Market Data | May 11, 2020

Interest in eSports is booming amid COVID-19

The industry has proved largely immune to the COVID-19 pandemic due to its prompt transition into online formats and sudden spike in interest from traditional sports organizations.

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