It's been awhile, but all signs are a go for Midwest construction. Architectural billings are up, construction backlogs are up and employment is up, according to data compiled by the American Institute of Architects (AIA), Associated Builders and Contractors (ABC) and Associated General Contractors of America (AGC), respectively.
It's not yet a story worth shouting from the rooftops – and no one is. Rather, the region appears to have been swept up in a larger phenomenon that in July found AIA's Architectural Billings Index at its highest point since 2007, and in the second quarter found ABC's Construction Backlog Index at its highest point since the index was launched.
One reason, as AIA point out, is that all regions finally appear to be fully aligned. While it has been two steps forward, one back for most regions, it has largely been a case of one forward, two back for the Midwest, the culprits ranging from shaky fiscal foundations in Illinois and Chicago to inertia among the region's energy and industrial sectors.
ABC reports both sectors are improving, with automobiles emerging as a star performer. The region's upswing mirrors that of the nation. According to AIA, commercial and industrial designers reported growth every month this year. Residential firms have logged nearly three years of uninterrupted growth.
“The long-awaited brisk non-residential construction recovery may be upon us,” says ABC Chief Economist Anirban Basu. “Industry momentum was snuffed out by a seemingly endless winter, but the pace of recovery has been accelerating ever since.”
Next up: how to attract manpower back to job sites.As AGC Chief Economist Ken Simonson notes, “It's hard to get labor back in the game when it's still harboring memories of seven years without work or a pay raise.”