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
Regulations | May 20, 2022
Biden’s Clean Air in Buildings Challenge aims to reduce COVID-19 spread
The Biden Administration recently launched the Clean Air in Buildings Challenge that calls on all building owners and operators, schools, colleges and universities, and organizations to adopt strategies to improve indoor air quality in their buildings and reduce the spread of COVID-19.
Building Team | May 20, 2022
Caltech breaks ground on a new center to study climate and sustainability
The California Institute of Technology (Caltech) recently broke ground on its Resnick Sustainability Resource Center.
Laboratories | May 20, 2022
Brutalist former Berkeley Art Museum transformed into modern life science lab
After extensive renovation and an addition, the former Berkeley Art Museum and Pacific Film Archive at the University of California, Berkeley campus reopened in May 2022 as a modern life science lab building.
Sports and Recreational Facilities | May 19, 2022
Northern Arizona University opens a new training center for its student athletes
In Flagstaff, Ariz. Northern Arizona University (NAU) has opened its new Student-Athlete High Performance Center.
Energy-Efficient Design | May 19, 2022
Shipping containers used to build Research Triangle Park’s first community gathering space
Shipping containers were the prominent building material used to construct Boxyard RTP, the first public community and gathering place in North Carolina’s Research Triangle Park (RTP).
Mixed-Use | May 19, 2022
Seattle-area project will turn mall into residential neighborhood
A recently unveiled plan will transform a 463,000 sf mall into a mixed-use destination site in the Seattle suburb of Bellevue, Wash.
Codes and Standards | May 19, 2022
JLL launches non-profit aiming to mitigate climate change
Real estate and investment management firm JLL recently launched JLL Foundation, a non-profit dedicated to making a long-term impact on environmental sustainability.
Office Buildings | May 19, 2022
JLL releases its 2022 Office Fit Out Guide
JLL’s 2022 Office Fit Out Guide report provides benchmark costs to build out a range of office types across major markets in the United States and Canada.
Biophilic Design | May 18, 2022
Horticulturalists conduct research study to understand the value of biophilic design
Benholm Group, horticulturalists that have pioneered the use of plants for interiors over the past 27 years, are collaborating on a research study to understand the value of biophilic design, according to a news release.
Market Data | May 18, 2022
Architecture Billings Index moderates slightly, remains strong
For the fifteenth consecutive month architecture firms reported increasing demand for design services in April, according to a new report today from The American Institute of Architects (AIA).