Associated Builders and Contractors reported today that its Construction Backlog Indicator rebounded modestly to 7.3 months in December, an increase of 0.1 months from November’s reading, according to an ABC member survey conducted from Dec. 18 to Jan. 5. Backlog is 1.5 months lower than in December 2019.
ABC’s Construction Confidence Index readings for sales, profit margins, and staffing levels increased in December. The sales index climbed above the threshold of 50, indicating contractors expect to grow sales over the next six months. The index reading for profit margins remained below that threshold. The staffing level index increased to 56.3 but remains well below its December 2019 reading.
“While many contractors enter 2021 with significant trepidation, the most recent backlog and confidence readings suggest that the onset of vaccinations has generally led to more upbeat assessments regarding nonresidential construction’s future,” said ABC Chief Economist Anirban Basu. “Backlog is down substantially from its year-ago level and profit margins remain under pressure, yet many contractors expect to enjoy higher sales and to support more staff six months from now.
“The baseline expectation is that by the spring, the U.S. economy will blossom,” said Basu. “With many households sitting on mounds of savings and sustaining pent-up demand for many goods and services, the U.S. economy is set for rapid growth as it reopens more fully during mid to late 2021. While it will take time for that to fully translate into new construction projects, some that were postponed earlier during the pandemic are likely to come back to life over the next several months. That should help many contractors begin to rebuild backlog, and to eagerly await 2022.”
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 | Apr 1, 2019
Nonresidential spending expands again in February
Private nonresidential spending fell 0.5% for the month and is only up 0.1% on a year-over-year basis.
Market Data | Mar 22, 2019
Construction contractors regain confidence in January 2019
Expectations for sales during the coming six-month period remained especially upbeat in January.
Market Data | Mar 21, 2019
Billings moderate in February following robust New Year
AIA’s Architecture Billings Index (ABI) score for February was 50.3, down from 55.3 in January.
Market Data | Mar 19, 2019
ABC’s Construction Backlog Indicator declines sharply in January 2019
The Construction Backlog Indicator contracted to 8.1 months during January 2019.
Market Data | Mar 15, 2019
2019 starts off with expansion in nonresidential spending
At a seasonally adjusted annualized rate, nonresidential spending totaled $762.5 billion for the month.
Market Data | Mar 14, 2019
Construction input prices rise for first time since October
Of the 11 construction subcategories, seven experienced price declines for the month.
Market Data | Mar 6, 2019
Global hotel construction pipeline hits record high at 2018 year-end
There are a record-high 6,352 hotel projects and 1.17 million rooms currently under construction worldwide.
Market Data | Feb 28, 2019
U.S. economic growth softens in final quarter of 2018
Year-over-year GDP growth was 3.1%, while average growth for 2018 was 2.9%.
Market Data | Feb 20, 2019
Strong start to 2019 for architecture billings
“The government shutdown affected architecture firms, but doesn’t appear to have created a slowdown in the profession,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD, in the latest ABI report.
Market Data | Feb 19, 2019
ABC Construction Backlog Indicator steady in Q4 2018
CBI reached a record high of 9.9 months in the second quarter of 2018 and averaged about 9.1 months throughout all four quarters of last year.
