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 | May 2, 2018

Construction employment increases in 245 metro areas between March 2017 & 2018, as trade fights & infrastructure funding shortfalls loom

Houston-The Woodlands-Sugar Land, Texas and Weirton-Steubenville, W.Va.-Ohio experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines.

Market Data | May 2, 2018

Nonresidential Construction down in March, private sector falters, public sector unchanged

February’s spending estimate was revised roughly $10 billion higher.

Market Data | Apr 30, 2018

Outlook mixed for renewable energy installations in Middle East and Africa region

Several major MEA countries are actively supporting the growth of renewable energy.

Market Data | Apr 12, 2018

Construction costs climb in March as wide range of input costs jump

Association officials urge Trump administration, congress to fund infrastructure adequately as better way to stimulate demand than tariffs that impose steep costs on contractors and project owners.

Market Data | Apr 9, 2018

Construction employers add 228,000 jobs over the year despite dip in March

Average hourly earnings increase to $29.43 in construction, topping private sector by nearly 10%; Association officials urge updating and better funding programs to train workers for construction jobs.

Market Data | Apr 4, 2018

Construction employment increases in 257 metro areas between February 2017 & 2018 as construction firms continue to expand amid strong demand

Riverside-San Bernardino-Ontario, Calif. and Merced, Calif. experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines in construction employment.

Market Data | Apr 2, 2018

Construction spending in February inches up from January

Association officials urge federal, state and local officials to work quickly to put recently enacted funding increases to work to improve aging and over-burdened infrastructure, offset public-sector spending drops.

Market Data | Mar 29, 2018

AIA and the University of Minnesota partner to develop Guides for Equitable Practice

The Guides for Equitable Practice will be developed and implemented in three phase.

Market Data | Mar 22, 2018

Architecture billings continue to hold positive in 2018

Billings particularly strong at firms in the West and Midwest regions.

Market Data | Mar 21, 2018

Construction employment increases in 248 metro areas as new metal tariffs threaten future sector job gains

Riverside-San Bernardino-Ontario, Calif., and Merced, Calif., experience largest year-over-year gains; Baton Rouge, La., and Auburn-Opelika, Ala., have biggest annual declines in construction employment.

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