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 19, 2020

5 must reads for the AEC industry today: May 19, 2020

Clemson's new mass timber building and empty hotels as an answer for the affordable housing shortage.

Market Data | May 18, 2020

5 must reads for the AEC industry today: May 18, 2020

California's grid can support all-electric buildings and you'll miss your office when it's gone.

Market Data | May 15, 2020

6 must reads for the AEC industry today: May 15, 2020

Nonresidential construction employment sees record loss and Twitter will keep all of its office space.

Market Data | May 15, 2020

Nonresidential construction employment sees record loss in April

The construction unemployment rate was 16.6% in April, up 11.9 percentage points from the same time last year.

Market Data | May 14, 2020

5 must reads for the AEC industry today: May 14, 2020

The good news about rent might not be so good and some hotel developers consider whether to abandon projects.

Market Data | May 13, 2020

House democrats' coronavirus measure provides some relief for contractors, but lacks other steps needed to help construction

Construction official says new highway funding, employee retention credits and pension relief will help, but lack of safe harbor measure, Eextension of unemployment bonus will undermine recovery.

Market Data | May 13, 2020

5 must reads for the AEC industry today: May 13, 2020

How to design resilient libraries in a post-covid world and vacation real-estate markets are 'toast.'

Market Data | May 12, 2020

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.

Market Data | May 12, 2020

6 must reads for the AEC industry today: May 12, 2020

A 13-point plan to reduce coronavirus deaths in nursing homes and Bjarke Ingels discusses building on Mars.

Market Data | May 11, 2020

Interest in eSports is booming amid COVID-19

The industry has proved largely immune to the COVID-19 pandemic due to its prompt transition into online formats and sudden spike in interest from traditional sports organizations.

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