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 | Apr 16, 2019

ABC’s Construction Backlog Indicator rebounds in February

ABC's Construction Backlog Indicator expanded to 8.8 months in February 2019.

Market Data | Apr 8, 2019

Engineering, construction spending to rise 3% in 2019: FMI outlook

Top-performing segments forecast in 2019 include transportation, public safety, and education.

Market Data | Apr 1, 2019

Nonresidential spending expands again in February

Private nonresidential spending fell 0.5% for the month and is only up 0.1% on a year-over-year basis.

Market Data | Mar 22, 2019

Construction contractors regain confidence in January 2019

Expectations for sales during the coming six-month period remained especially upbeat in January.

Market Data | Mar 21, 2019

Billings moderate in February following robust New Year

AIA’s Architecture Billings Index (ABI) score for February was 50.3, down from 55.3 in January.

Market Data | Mar 19, 2019

ABC’s Construction Backlog Indicator declines sharply in January 2019

The Construction Backlog Indicator contracted to 8.1 months during January 2019.

Market Data | Mar 15, 2019

2019 starts off with expansion in nonresidential spending

At a seasonally adjusted annualized rate, nonresidential spending totaled $762.5 billion for the month.

Market Data | Mar 14, 2019

Construction input prices rise for first time since October

Of the 11 construction subcategories, seven experienced price declines for the month.

Market Data | Mar 6, 2019

Global hotel construction pipeline hits record high at 2018 year-end

There are a record-high 6,352 hotel projects and 1.17 million rooms currently under construction worldwide.

Market Data | Feb 28, 2019

U.S. economic growth softens in final quarter of 2018

Year-over-year GDP growth was 3.1%, while average growth for 2018 was 2.9%.

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