According to Associated Builders and Contractors (ABC), the Construction Backlog Indicator (CBI) for the fourth quarter of 2014 declined 0.1 months, or 1%. Despite the quarter-over-quarter decline, backlog ended the year at 8.7 months, which is still 4.4% higher than one year ago.
"Inconsistent growth in the volume of public work continues to suppress the pace of nonresidential construction; however, private construction momentum continues to build," said ABC Chief Economist Anirban Basu. "With hotel occupancy rising, office vacancy falling and demand for data climbing exponentially, a number of key private segments are positioned for rapid growth in construction spending this year.
"There are a number of factors that are likely to be beneficial to nonresidential contractors in 2015," said Basu. "First, although interest rates were expected to rise after the Federal Reserve ended its third round of quantitative easing, they have actually been trending lower—due to factors such as falling interest rates abroad and a strengthening U.S. dollar—which helps contractors with construction volume and borrowing costs. Second, materials prices have continued to fall—particularly inputs related to the price of oil, iron ore and copper. This also makes it more likely that construction projects will move forward and helps boost profit margins."
Regional Highlights
• Average backlog in the South is back above 9 months for the first time since the first quarter of 2014.
• Though backlog in the West fell sharply during 2014's final quarter, average backlog remains comparable to where it was a year ago.
• Both the Northeast and the Middle States registered levels of average backlog unseen during the history of the CBI survey.
Industry Highlights
• Average backlog in the commercial and institutional category is virtually unchanged over the past year, suggesting the pace of recovery will remain moderate overall.
• Infrastructure-related spending is likely to be brisk going forward primarily due to improved state and local government fiscal conditions.
• Heavy industrial average backlog remains in the vicinity of multi-year highs, but these readings do not fully reflect the impact of a stronger U.S. dollar, which may result in a slowdown in export growth and an associated softening in industrial investment.
Highlights by Company Size
• During the fourth quarter, backlog expanded for mid-sized companies with annual revenue ranging between $30 million-$100 million. These firms enjoyed approximately half a month expansion in their respective average backlogs during the fourth quarter.
• On the other hand, backlog for small firms (annual revenue less than $30 million) and very large firms (annual revenue greater than $100 million) declined 0.2 months and 0.5 months, respectively.
• Large firms appear to have been impacted by a slowdown in large project infrastructure spending in certain parts of the country, while smaller firms have been impacted by greater observed difficulty in obtaining bonding for projects in the context of accelerating small firm failure.
• Average backlog has increased by nearly three months or by more than three months for all firm size categories since the fourth quarter of 2009.
Related Stories
| Oct 24, 2014
Herzog & de Meuron reveals plans for redesign of Roche pharmaceutical campus in Germany
The project includes the addition of a 205-meter-high tower and research center, as well as the renovation of an historic office building designed by Swiss architect Otto R. Salvisber.
Sponsored | | Oct 23, 2014
From slots to public safety: Abandoned Detroit casino transformed into LEED-certified public safety headquarters
First constructed as an office for the Internal Revenue Service, the city's new public safety headquarters had more recently served as a temporary home for the MGM Casino. SPONSORED CONTENT
| Oct 23, 2014
Santiago Calatrava-designed church breaks ground in Lower Manhattan
Saturday marked the public "ground blessing" ceremony for the Saint Nicholas National Shrine, the Greek Orthodox Church destroyed on 9/11 by the collapse of the World Trade Center towers.
| Oct 23, 2014
Prehistory museum's slanted roof mimics archaeological excavation [slideshow]
Mimicking the unearthing of archaeological sites, Henning Larsen Architects' recently opened Moesgaard Museum in Denmark has a planted roof that slopes upward out of the landscape.
| Oct 23, 2014
China's 'weird' buildings: President Xi Jinping wants no more of them
During a literary symposium in Beijing, Chinese President Xi Jinping urged architects, authors, actors, and other artists to produce work with "artistic and moral value."
| Oct 22, 2014
Customization is the key in tomorrow's workplace
The importance of mobility, flexibility, and sustainability in the world of corporate design are already well-established. A newer trend that’s gaining deserved attention is customizability, and how it will look in the coming years, writes GS&P's Leith Oatman.
| Oct 21, 2014
Passive House concept gains momentum in apartment design
Passive House, an ultra-efficient building standard that originated in Germany, has been used for single-family homes since its inception in 1990. Only recently has the concept made its way into the U.S. commercial buildings market.
| Oct 21, 2014
Hartford Hospital plans $150 million expansion for Bone and Joint Institute
The bright-white structures will feature a curvilinear form, mimicking bones and ligament.
| Oct 21, 2014
Norman Foster, Zaha Hadid release plans for resorts in Nanjing and Wuhan, China
Jumeirah Group, a hotel group forming a part of investment group Dubai Holding, has chosen Zaha Hadid and Norman Foster to design two of three of its proposed resorts in Nanjing, Wuhan, and Haikou.
| Oct 21, 2014
Inside LEED v4: The view from the MEP engineering seats
Much of the spirited discussion around LEED v4 has been centered on the Materials & Resources Credit. At least one voice in the wilderness is shouting for greater attention to another huge change in LEED: the shift to ASHRAE 90.1-2010 as the new reference standard for Energy & Atmosphere prerequisites and credits.