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

Healthcare Facilities | Feb 18, 2021

The Weekly show, Feb 18, 2021: What patients want from healthcare facilities, and Post-COVID retail trends

This week on The Weekly show, BD+C editors speak with AEC industry leaders from JLL and Landini Associates about what patients want from healthcare facilities, based on JLL's recent survey of 4,015 patients, and making online sales work for a retail sector recovery.

Market Data | Feb 17, 2021

Soaring prices and delivery delays for lumber and steel squeeze finances for construction firms already hit by pandemic

Association officials call for removing tariffs on key materials to provide immediate relief for hard-hit contractors and exploring ways to expand long-term capacity for steel, lumber and other materials,

Market Data | Feb 9, 2021

Construction Backlog and contractor optimism rise to start 2021, according to ABC member survey

Despite the monthly uptick, backlog is 0.9 months lower than in January 2020.

Market Data | Feb 9, 2021

USGBC top 10 states for LEED in 2020

The Top 10 States for LEED green building is based on gross square feet of certified space per person using 2010 U.S. Census data and includes commercial and institutional projects certified in 2020.

Market Data | Feb 8, 2021

Construction employment stalls in January with unemployment rate of 9.4%

New measures threaten to undermine recovery.

Market Data | Feb 4, 2021

Construction employment declined in 2020 in majority of metro areas

Houston-The Woodlands-Sugar Land and Brockton-Bridgewater-Easton, Mass. have worst 2020 losses, while Indianapolis-Carmel-Anderson, Ind. and Walla Walla, Wash. register largest gains in industry jobs.

Market Data | Feb 3, 2021

Construction spending diverges in December with slump in private nonresidential sector, mixed public work, and boom in homebuilding

Demand for nonresidential construction and public works will decline amid ongoing pandemic concerns.

Market Data | Feb 1, 2021

The New York City market is back on top and leads the U.S. hotel construction pipeline

New York City has the greatest number of projects under construction with 108 projects/19,439 rooms.

Market Data | Jan 29, 2021

Multifamily housing construction outlook soars in late 2020

Exceeds pre-COVID levels, reaching highest mark since 1st quarter 2018.

Market Data | Jan 29, 2021

The U.S. hotel construction pipeline stands at 5,216 projects/650,222 rooms at year-end 2020

At the end of Q4 ‘20, projects currently under construction stand at 1,487 projects/199,700 rooms.

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