ABC Construction Backlog Indicator Falls 3.3
November 16, 2010
The Associated Builders and Contractors (ABC) today reports that
its latest Construction Backlog Indicator (CBI) is sliding backward
as the nation's construction contract activity declined 3.3 percent
in September to 6.7 months after falling more than 5 percent in
August to 6.9 months. CBI is a forward-looking indicator that measures
the amount of construction work under contract to be completed in
"CBI is now edging back toward levels observed in early 2010
as new government stimulus-financed construction projects are no
longer translating into additional backlog - a lack of momentum
in three construction segments that is cause for concern,"
says ABC chief economist Anirban Basu. "However, CBI remains
well above its historic low point of 5.5 months recorded in January
of this year.
"Construction backlog in the infrastructure-related sector
is no longer expanding because fewer new contracts are being put
on the table. For many months, the infrastructure category drove
increases in backlog, but that is no longer occurring. Backlog in
the infrastructure category is now approaching nine months, down
from more than 11 months during the early summer of 2010 while recovery
in privately financed activities remains stalled, with the overall
effect that backlog is now shrinking in that sector," Basu
"The U.S. economic recovery is now roughly 17 months old and
nonresidential construction activities typically lag the overall
economy by 12 to 24 months, with the implication that privately
financed activities should soon begin to show signs of rebound,"
continues Basu. "However, through September, backlog in categories
dominated by private financing has yet to expand on a sustained
basis. ABC anticipates improvement in construction backlog in the
industrial and commercial/institutional categories as the economy
continues to recover. However, backlog may continue to decline in
the infrastructure category as stimulus funds are steadily spent
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