flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

ABC’s Construction Backlog Indicator inches higher in May; Contractor confidence continues to rebound

Market Data

ABC’s Construction Backlog Indicator inches higher in May; Contractor confidence continues to rebound

Nonresidential construction backlog is down 0.8 months compared to May 2019 and declined year over year in every industry.


By ABC | June 9, 2020

Construction Backlog Indicator rose to 7.9 months in May, an increase of less than 0.1 months from April’s reading. Furthermore, based on an ABC member survey conducted May 20-June 3, results indicate that confidence among U.S. construction industry leaders continued to rebound from the historically low levels observed in the March survey.

Nonresidential construction backlog is down 0.8 months compared to May 2019 and declined year over year in every industry, classification and region. Backlog in the heavy industrial category, however, increased by nearly one month in May after reaching its lowest level in the history of the series in April.  

 

 

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels expectations all increased in May, although sales and profit margin expectations remain below the threshold of 50, indicating ongoing anticipation of contraction. The staffing level index remained above that threshold, with more than 38% of contractors expecting to expand their staff during the next six months.

More than 45% of contractors expect their sales to decline during the next six months while 35% expect sales to increase. More than 48% of contractors expect their profit margins to decrease over the next two quarters.

  • The CCI for sales expectations increased from 41.1 to 44.9 in May.
  • The CCI for profit margin expectations increased from 39.8 to 41.7.
  • The CCI for staffing levels increased from 51.4 to 53.

 

“Given the depth of the economic downturn and myriad other issues facing America today, backlog and contractor confidence data have held up better than one might have anticipated,” said ABC Chief Economist Anirban Basu. “But the marketplace is still tilted toward pessimism. For instance, more contractors expect sales and profit margins to decline than increase over the next six months, which is consistent with anecdotal information suggesting that many project owners are considering postponing projects and possibly rebidding them.

“After falling meaningfully in April, backlog remained relatively unchanged in May, hinting at a stable nonresidential construction marketplace,” said Basu. “However, the underlying survey received fewer responses compared to earlier months in the COVID-19 crisis, perhaps suggesting that some contractors are no longer operating at previous capacity, inducing available work to move toward better-positioned contractors. To the extent that these stronger contractors are reflected in the survey, this would tend to bolster average backlog even in the context of a subdued marketplace.

“Contractors still expect to boost staffing levels over the next six months,” said Basu. “But this may simply be a function of jobsites reopening as construction shutdowns end. Almost 70% of respondents had jobsites shut down due to government mandates and other reasons, and with labor shortages in place before the pandemic, contractors may have residual staffing needs. It remains to be seen whether expected employment growth going forward coincides with speedy recovery in overall contractor confidence and backlog.”

 

 

 

 

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