Construction Backlog Declines 5.4 Percent in the 2012 First Quarter
May 16, 2012

The Construction Backlog Indicator (CBI) for the 2012 first quarter, which was released today, declined 5.4 percent from the previous quarter, dipping from 7.8 months to 7.4 months, but is slightly higher compared to the first quarter of 2011, according to information released by Associated Builders and Contractors Inc. (ABC) today. The 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," says 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."

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.

"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 says. "The result is that many prospective construction projects were cancelled or postponed."