Construction Backlog Takes Dip in Early Part of 2014

The Associated Builders and Contractors (ABC) credits harsh winter weather for part of the 2.8 percent decline in its Construction Backlog Indicator (CBI) during the first quarter of 2014.

Overall, CBI now stands at 8.1 months—down from the 8.3 months in the previous quarter, but up from 7.9 months a year ago.

“Despite a decline in overall backlog, only one of three industry segments, commercial/institutional, saw a decrease in backlog during the first quarter,” says ABC chief economist Anirban Basu. “Retailers and other commercial actors have been seeking to build cash reserves rather than to expand operational capacity, which helps explain the decline.

“However, second quarter business spending appears to be on the rise. Many companies are flush with cash and small business confidence is improving, which means commercial backlog is expected to expand during 2014’s second quarter and likely beyond.”

According to ABC, the West region was the only region to experience expanding backlog, and while the South experienced the sharpest downturn in backlog, it also continues to boast the lengthiest backlog of all four major regions.

The West posted the largest gain in average contractor backlog on both a quarterly and year-over-year basis largely because California, Arizona, Nevada, Washington state and Oregon are among the most rapidly recovering states.

Larger firms with annual revenues above $100 million continue to report the lengthiest backlog at 11.7 months–the second largest reading this category has seen. Firms with $50 million to $100 million in annual revenue are the second most successful in terms of contracted work, with backlog at 10.69 months, although their average backlog is down from 11.52 months last quarter.

Smaller firms experienced a half-month decline in backlog during the first quarter but still enjoy a higher backlog than a year ago at 7.16 months.

This entry was posted in Today's News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Current day month ye@r *