Associated Builders and Contractors (ABC) Construction Backlog Indicator (CBI) reached an all-time high in the second quarter of 2014. CBI improved 5.4 percent following a 2.8 percent decline in the first quarter and currently stands at 8.5; up 3.6 percent on a year-over-year basis.
"The long-awaited brisk nonresidential construction recovery may be upon us," said ABC Chief Economist Anirban Basu. "Industry momentum was snuffed out by a seemingly endless winter, but the pace of industry recovery has been accelerating ever since. Backlog gains were nearly ubiquitous during the second quarter, with gains registered in every industry segment, in nearly all geographies and for firms of virtually all sizes.
"Further increases in construction backlog are likely given remarkably accommodative Federal Reserve policy even after five completed years of economic expansion, accelerated job growth and rising consumer confidence," said Basu. "The nation has added roughly 2.5 million jobs over the past year, consistent with growing demand for space. Financing conditions have also improved, which should set the stage for more rapid nonresidential construction recovery in a number of key construction segments, including office (classified within commercial/institutional) and manufacturing (classified within heavy industrial) segments."
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Regional Highlights
• Backlog in the South has fallen just below 9 months, down from 9.14 months in the first quarter and from 9.05 months a year ago.
• The Northeast’s backlog now stands at 9.36 months, which is still slightly below where it was this time last year (9.41 months), but an improvement from 8.34 months in the first quarter.
• Backlog in the Middle States is now at 6.42 months compared to 6.32 months a year ago and 6.16 months in the first quarter of 2014.
• The West’s backlog stands at 9.22 months, up significantly from 8.21 months on a year-over-year basis and 8.09 months from last quarter.
Industry Highlights
• The commercial and institutional segment is just shy of its longest backlog recorded in CBI history at 8.90 months, up from 8.66 months one year ago and 8.44 months in the first quarter.
• Backlog in the heavy industrial segment gained nearly a full month from the first quarter and now stands at 6 months, up from 5.08 months in the first quarter and 5.8 months from the second quarter of 2013.
• Backlog in the infrastructure segment improved to 8.61 months from 7.93 months in the first quarter but is down from 8.96 on a year-over-year basis.
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Highlights by Company Size
• The smallest firms, those with revenue less than $30 million, saw their backlog increase to 7.59 months, up from 7.16 months in the first quarter and 6.96 from the second quarter of 2013.
• Backlog from firms with $30-$50 million in revenue increased to 8.97 months, a significant increase from 7.58 months year over year and from 7.9 months from last quarter.
• Firms with revenue between $50-$100 million now have the longest backlog at 11.3 months, up from 10.69 months in the first quarter but down from 11.57 months a year ago.
• The largest firms, those with revenue over $100 million, saw their backlog decrease to 11.16 months from 11.7 months last quarter and 12.25 months a year ago.
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To read more about the latest CBI, click here.
About CBI:
CBI is a leading economic indicator reflecting the amount of construction work under contract but not yet completed. CBI is measured in months with a lengthening backlog implying expanding demand for construction services.
About ABC
Associated Builders and Contractors (ABC) is a national construction industry trade association representing nearly 21,000 chapter members. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, secure work and deliver that work safely, ethically, profitably and for the betterment of the communities in which ABC and its members operate.