Press Release Summary:
The Associated Builders and Contractors says an increase in the monthly backlog indicator of 8.8% in March 2019. According to the report the nonresidential construction spending activity lags the overall performance of the U.S. economy by 12-18 months. In first quarter more number of construction projects appeared to be greenlighted that translated into meaningful increase in construction backlog.
Original Press Release:
ABC’s Construction Backlog Indicator Surges in March
WASHINGTON, May 21—Associated Builders and Contractors reports that its monthly Construction Backlog Indicator expanded to 9.5 months in March 2019, up 0.7 months or 8.8% since February 2019 when CBI stood at 8.8 months.
“The U.S. economy has been humming and construction backlog is correspondingly elevated,” said ABC Chief Economist Anirban Basu. “While there was a period of weakness in backlog in January, those dynamics, which may very well be seasonal, are no longer affecting the market. The U.S. economy’s strong first quarter appears to have greenlighted more construction projects, translating into ongoing and meaningful increases in construction backlog.
“As a forward-looking indicator of economic activity, CBI stands in stark contrast to a number of other indicators,” said Basu. “Many business surveys suggest eroding confidence across the United States, even before the trade dispute between China and the United States heated up in recent weeks. But nonresidential contractors have demonstrated little—if any—loss in confidence, with ABC’s February Construction Confidence Indicator remaining robust. The most glaring exception is industrial contracting, for which CBI declined sharply in March.
“The general optimism of nonresidential construction firms may have something to do with the timing of construction cycles,” said Basu. “Nonresidential construction spending activity lags the overall performance of the U.S. economy by 12-18 months. Accordingly, the typical nonresidential contractor has little reason for concern until 2020. Other businesses, including retailers, are more likely to be immediately impacted by macroeconomic performance.
“In any case, nonresidential construction backlog has seldom been higher in the history of the series,” said Basu. “The implication is that those looking for employment in construction, especially in the skilled trades, will continue to find considerable demand for their services.”
Visit ABC for the Construction Backlog Indicator, Construction Confidence Index and state unemployment reports, plus analysis of spending, employment, GDP and the Producer Price Index.
Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 69 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.
Donna Reichle, ABC, (202) 595-1782, firstname.lastname@example.org