Construction Backlog Indicator Reaches All-Time High
The Associated Builders and Contractors Construction Backlog Indicator (CBI) reached an all-time high in the second quarter of 2014. CBI improved 5.4% following a 2.8% decline in the first quarter and currently stands at 8.5, up 3.6% 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 a 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.”
• 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.