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Construction Backlog Declines 5.4% in Q1 2012

May 18, 2012, 07:30 AM
Filed Under: Construction

Associated Builders and Contractors (ABC) released its Construction Backlog Indicator (CBI) for the first quarter of 2012. CBI declined 5.4% from the previous quarter, dipping from 7.8 months to 7.4 months, but is slightly higher compared to the first quarter of 2011. CBI is a forward-looking economic indicator that measures the amount of construction work under contract to be completed in the future.

“On the heels of a mixed bag of national economic news, CBI declined for the second quarter in a row,” said ABC Chief Economist Anirban Basu. “The lull in nonresidential construction momentum is not poised to end in the immediate term. The nation’s nonresidential construction activity will remain soft during the summer months, with flat to declining nonresidential construction spending.”

“The ongoing instability in the nation’s nonresidential construction industry appears to be related to the period of economic weakness that developed in the broader economy last year, as well as concerns regarding export growth due to recessionary forces in Europe,” Basu said. “The result is that many prospective construction projects were cancelled or postponed.”

Regional Highlights

  • Compared to the first quarter of 2011, construction backlog is slightly higher in every region with the exception of the Northeast.
  • In the West, construction backlog expanded by 0.46 months from the fourth quarter of 2011 to the first quarter of this year.
  • The Middle States have the shortest backlog at 6.34 months and the South continues to register the lengthiest backlog at 8.88 months.

Highlights by Company Size

  • Construction backlog for mid-sized firms with annual revenue between $30 and $50 million expanded substantially, rising nearly two months during the first quarter.
  • Construction backlog declined for firms with less than $30 million in annual revenue to an average of 6.72 months.
  • Firms with annual revenues in excess of $50 million have not experienced backlog expansion during the past year.

Read the full Associated Builders and Contractors Q1 2012 Construction Backlog Indicator Report

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