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 | Jul 19, 2021

Construction employment trails pre-pandemic level in 39 states

Supply chain challenges, rising materials prices undermine demand.

Market Data | Jul 15, 2021

Producer prices for construction materials and services soar 26% over 12 months

Contractors cope with supply hitches, weak demand.

Market Data | Jul 13, 2021

ABC’s Construction Backlog Indicator and Contractor Confidence Index rise in June

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels increased modestly in June.

Market Data | Jul 8, 2021

Encouraging construction cost trends are emerging

In its latest quarterly report, Rider Levett Bucknall states that contractors’ most critical choice will be selecting which building sectors to target.

Multifamily Housing | Jul 7, 2021

Make sure to get your multifamily amenities mix right

​One of the hardest decisions multifamily developers and their design teams have to make is what mix of amenities they’re going to put into each project. A lot of squiggly factors go into that decision: the type of community, the geographic market, local recreation preferences, climate/weather conditions, physical parameters, and of course the budget. The permutations are mind-boggling.

Market Data | Jul 7, 2021

Construction employment declines by 7,000 in June

Nonresidential firms struggle to find workers and materials to complete projects.

Market Data | Jun 30, 2021

Construction employment in May trails pre-covid levels in 91 metro areas

Firms struggle to cope with materials, labor challenges.

Market Data | Jun 23, 2021

Construction employment declines in 40 states between April and May

Soaring material costs, supply-chain disruptions impede recovery.

Market Data | Jun 22, 2021

Architecture billings continue historic rebound

AIA’s Architecture Billings Index (ABI) score for May rose to 58.5 compared to 57.9 in April.

Market Data | Jun 17, 2021

Commercial construction contractors upbeat on outlook despite worsening material shortages, worker shortages

88% indicate difficulty in finding skilled workers; of those, 35% have turned down work because of it.

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