In markets where labor continues to be in short supply, contractors that can attract and retain workers are capable of accepting projects that other manpower-deficient competitors might be turning away.
Labor availability is an important distinction in a construction market that “has stabilized at a comfortable level.” The backlog for the nation’s largest contractors stands at a record 12 months, according to the latest estimates from Associated Builders and Contractors (ABC), a national trade association representing 70 chapters with nearly 21,000 members.
The group’s Construction Backlog Indicator, which has measured the national backlog average for every quarter since Q2 2009, stood at 8.6 months, compared to 8.7 months in Q4 2015 and 8.5 months for Q1 2015.
Where contractor backlogs in the Midwest increased by double digit percentages in the latest quarter measured, they fell in the Northeast, South, and West compared to the previous quarter.
ABC's latest Construction Backlog Index shows that contractors in the Midwest saw the biggest change in their backlogs during the first quarter of this year, as did companies whose revenues range from $50 million to $100 million. Image: Associated Builders and Contractors.
However, contractors in the South have reported average backlogs in excess of 10 months for three consecutive quarters, which is unprecedented in the history of ABC’s series. And while the Northeast isn’t expanding, the region “continues to experience a considerable volume of activity related to commercial development,” including ecommerce fulfillment centers, said ABC.
Backlogs for Commercial/Institutional (which have exceeded eight months for 3½ years), and heavy industrial were up in the most recent quarter tracked, where infrastructure backlogs, while outpacing other sectors at 11.2 months, were down slightly. “The passage of the FAST Act and growing focus among many state and local government policymakers should allow backlog in the infrastructure category to remain elevated,” ABC stated.
Companies with more than $100 million in revenue reported an average 12.25 months of backlog, representing a 3.8% gain over the previous quarter, which itself had set the previous record.
Apparently, the largest firms have recently been taking market share primarily from companies in the $30 million to $100 million range, which reported backlog declines. Companies under $30 million in revenue, on the other hand, enjoyed a modest backlog increase, and have collectively reported backlogs in excess of seven months for 11 consecutive quarters.
“Most contractors continue to express satisfaction regarding the amount of work they have under contract. This is of course truer in certain parts of the nation than others,” said Anirban Basu, ABC’s Chief Economist.
Indeed, backlogs in the West slipped in the latest quarter, even as technology generates “profound levels of activity” in markets like San Jose, Seattle, and San Diego.
ABC's data track a steady increase in national average backlogs dating back to the second quarter of 2009. Image: Associated Builders and Contractors.
Related Stories
Green | Jul 8, 2024
Global green building alliance releases guide for $35 trillion investment to achieve net zero, meet global energy transition goals
The international alliance of UK-based Building Research Establishment (BRE), the Green Building Council of Australia (GBCA), the Singapore Green Building Council (SGBC), the U.S. Green Building Council (USGBC), and the Alliance HQE-GBC France developed the guide, Financing Transformation: A Guide to Green Building for Green Bonds and Green Loans, to strengthen global cooperation between the finance and real estate sectors.
Codes and Standards | Jul 8, 2024
New York State building code update would ban fossil fuels in new buildings
New York’s Building Code Council is set to include the All-Electric Buildings Act in its 2025 code update. The Act would ban natural gas and other fossil fuels in new buildings.
AEC Tech Innovation | Jul 4, 2024
Caution competes with inevitability at conference exploring artificial intelligence for design and construction
Hosted by PSMJ, AEC Innovate in Boston found an AEC industry anxiously at the threshold of change.
Building Team | Jul 3, 2024
So you want to get published: What’s next?
In the AEC industry, securing media attention is no longer a niche endeavor but an essential component of a holistic marketing strategy.
MFPRO+ New Projects | Jul 2, 2024
Miami residential condo tower provides a deeded office unit for every buyer
A new Miami residential condo office tower sweetens the deal for buyers by providing an individual, deeded and furnished office with each condo unit purchased. One Twenty Brickell Residences, a 34-story, 240-unit tower, also offers more than 60,000 sf of exclusive residential amenities.
Student Housing | Jul 1, 2024
Two-tower luxury senior living community features wellness and biophilic elements
A new, two-building, 27-story senior living community in Tysons, Va., emphasizes wellness and biophilic design elements. The Mather, a luxury community for adults aged 62 and older, is situated on a small site surrounded by high-rises.
Contractors | Jul 1, 2024
Nonresidential construction spending slips 0.1% in May but remains elevated
National nonresidential construction spending decreased 0.1% in May, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.21 trillion.
Contractors | Jul 1, 2024
New emergency cooling vest can prevent heat-related deaths on construction sites
A new emergency cooling vest is designed to prevent heat-related deaths without requiring electricity or refrigeration. The lightweight ColdVest is the world’s first portable, Class 1 FDA emergency cooling device that can rapidly lower core body temperatures up to 5 degrees in under 3 minutes.
Smart Buildings | Jul 1, 2024
GSA to invest $80 million on smart building technologies at federal properties
The U.S. General Services Administration (GSA) will invest $80 million from the Inflation Reduction Act (IRA) into smart building technologies within 560 federal buildings. GSA intends to enhance operations through granular controls, expand available reporting with more advanced metering sources, and optimize the operator experience.
Sustainability | Jul 1, 2024
Amazon, JPMorgan Chase among companies collaborating with ILFI to advance carbon verification
Four companies (Amazon, JPMorgan Chase, JLL, and Prologis) are working with the International Living Future Institute to support development of new versions of Zero Carbon Certification.