The Construction Backlog Indicator (CBI) declined 1 percent, or 0.1 months, in the fourth quarter of 2014, according to Associated Builders and Contractors (ABC). The backlog, however, ended the year at 8.7 months, still 4.4 percent higher than one year ago.

“Inconsistent growth in the volume of public work continues to suppress the pace of nonresidential construction; however, private construction momentum continues to build,” says ABC chief economist Anirban Basu. “With hotel occupancy rising, office vacancy falling and demand for data climbing exponentially, a number of key private segments are positioned for rapid growth in construction spending this year.”

He continues, “There are a number of factors that are likely to be beneficial to nonresidential contractors in 2015. First, although interest rates were expected to rise after the Federal Reserve ended its third round of quantitative easing, they have actually been trending lower—due to factors such as falling interest rates abroad and a strengthening U.S. dollar—which helps contractors with construction volume and borrowing costs. Second, materials prices have continued to fall—particularly inputs related to the price of oil, iron ore and copper. This also makes it more likely that construction projects will move forward and helps boost profit margins.”

Regionally, average backlog in the South is back above nine months for the first time since the first quarter of 2014. And while backlog in the West fell sharply during 2014’s final quarter, average backlog remains comparable to where it was a year ago. Both the Northeast and the Middle States registered levels of average backlog “unseen during the history of the CBI survey,” according to ABC.

Sector-wise, average backlog in the commercial and institutional category is virtually unchanged over the past year, “suggesting the pace of recovery will remain moderate overall,” ABC’s report reads. “Infrastructure-related spending is likely to be brisk going forward primarily due to improved state and local government fiscal conditions.”

During the fourth quarter, backlog expanded for mid-sized companies with annual revenue ranging between $30 million-$100 million. These firms enjoyed approximately half a month expansion in their respective average backlogs during the fourth quarter.

However, backlog for small firms (annual revenue less than $30 million) and very large firms (annual revenue greater than $100 million) declined 0.2 months and 0.5 months, respectively.

“Large firms appear to have been impacted by a slowdown in large project infrastructure spending in certain parts of the country, while smaller firms have been impacted by greater observed difficulty in obtaining bonding for projects in the context of accelerating small firm failure,” according to ABC.

Average backlog has increased by nearly three months or by more than three months for all firm size categories since the fourth quarter of 2009.