Average construction backlogs in the Midwest nudged higher in the fourth quarter, from 6.92 months to 7.02 months – a 1.4% increase – in quarter-to-quarter comparisons, according to data compiled by Washington, D.C.-based Associated Builders and Contractors (ABC). The quarter marked the first time Midwest backlogs have exceeded 7%, ABC indicated. For the same period, backlogs rose 9.2% in year-over-year comparisons.
ABC data indicate a surge of infrastructure projects in the Midwest and Northeast propelled the segment to an average backlog of nearly 10 months in the fourth quarter. Shale-related production has spread to Ohio and Illinois and industrial production also has been edging higher in the region, ABC says.
However, a 21% decrease in the West, from 9.42 months to 7.42 months, contributed to a decline in national backlogs, from 8.8 months to 8.7 months, in quarter-to-quarter comparisons. Nevertheless, the year concluded 4.4% higher than in the final quarter of 2013.
Backlogs in the South rose 3.5%, to 9.29 months, in quarter-to-quarter comparisons, while backlogs in the Northeast remained at 10.18 months.
Declines in the West placed the region on par with backlog levels from a year ago.
“Inconsistent growth in the volume of public work continues to suppress the pace of non-residential construction, says ABC Chief Economist Anirban Basu. “However, private construction momentum continues to build. With hotel occupancy rising, office vacancies falling and demand for data climbing exponentially, a number of key private segments are positioned for rapid growth in construction spending this year.”
Yet, average backlogs in the commercial and institutional categories remain virtually unchanged over the past year, suggesting the pace of recovery will remain moderate overall, ABC says.
Average backlogs in the heavy industrial segment rose two months in year-over-year comparisons, reflecting a surge in industrial production begun in mid-2009, at the recession's conclusion.