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
| Mar 27, 2012
Precast concrete used for affordable, sustainable housing in New York
Largest affordable housing development in the nation will provide housing for close to 500,000 people.
| Mar 27, 2012
Groundbreaking held for Valencia College West Campus Building 10 in Orlando
Project led by design-build team of SchenkelShultz Architecture and McCree General Contractors, both of Orlando.
| Mar 27, 2012
Hollister Construction completes LEED Silver bank in Woodland Park, N.J.
Ground-up construction project included installation of solar panels.
| Mar 26, 2012
Jones Lang LaSalle completes construction of $536M Parkview Regional Medical Center
Hospital ushers in new era of local access to advanced medical treatments in Northeast Indiana.
| Mar 26, 2012
McCarthy tops off Math and Science Building at San Diego Mesa College
Designed by Architects | Delawie Wilkes Rodrigues Barker, the new San Diego Mesa College Math and Science Building will provide new educational space for students pursuing degree and certificate programs in biology, chemistry, physical sciences and mathematics.
| Mar 26, 2012
Los Angeles County to host free green building training
Opportunity for residential and commercial building professionals to gain insight on state and county green building standards and regulations.
| Mar 26, 2012
Ball State University completes nation's largest ground-source geothermal system
Ball State's geothermal system will replace four aging coal-fired boilers to provide renewable power that will heat and cool 47 university buildings, representing 5.5-million-sf on the 660-acre campus.
| Mar 22, 2012
Hawaiian architecture firm chooses FRP trellis system over traditional materials
MGA Architecture plans to add five more trellis systems on the neighboring building.
| Mar 22, 2012
Moline Public Library uses copper as an exterior building material
Architects incorporate decorative copper panels to create the look of a heavy plate copper shingle.
| Mar 21, 2012
10 common data center surprises
Technologies and best practices provide path for better preparation.