Construction Backlog Indicator Hits Post-Recession High

Associated Builders and Contractors’ (ABC) Construction Backlog Indicator (CBI) hit a post-recession high in the fourth quarter of 2013, growing from 8.2 months to 8.3 months (1.3 percent). Compared to a year ago, the CBI is 3.9 percent higher—up from 8 months at the end of 2012.

“CBI indicates the final three quarters of 2013 were a period of progress for nonresidential construction,” says ABC chief economist Anirban Basu. “Although other indicators have not been quite as positive—nonresidential construction spending has risen only sporadically in recent months—the first quarter’s bitter weather likely means some construction activity has been put off, which means the positive trend reflected in this CBI will likely continue.

“Although CBI’s pace of expansion should be enough to keep the nonresidential construction recovery going, there are significant headwinds for the industry,” he continues. “The December and January job reports show the economic recovery is sporadic and uncertainties surrounding the healthcare law also are likely to slow full-time job creation for several reasons … Sequestration, though recently relaxed, still constrains federal spending growth and many state and local governments continue to wrestle with burgeoning health care costs and underfunded pension liabilities.”

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