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
Giants 400 | Dec 5, 2023
Top 70 Federal Government Building Architecture Firms for 2023
Page Southerland Page, HOK, Gensler, LEO A DALY, and Stantec top BD+C's ranking of the nation's largest federal government building architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
University Buildings | Dec 5, 2023
The University of Cincinnati builds its largest classroom building to serve its largest college
The University of Cincinnati’s recently completed Clifton Court Hall unifies the school’s social science programs into a multidisciplinary research and education facility. The 185,400-sf structure is the university’s largest classroom building, serving its largest college, the College of Arts and Sciences.
MFPRO+ News | Dec 5, 2023
DOE's Zero Energy Ready Home Multifamily Version 2 released
The U.S. Department of Energy has released Zero Energy Ready Home Multifamily Version 2. The latest version of the certification program increases energy efficiency and performance levels, adds electric readiness, and makes compliance pathways and the certification process more consistent with the ENERGY STAR Multifamily New Construction (ESMFNC) program.
Giants 400 | Nov 28, 2023
Top 55 Laboratory Construction Firms for 2023
Whiting-Turner, DPR Construction, STO Building Group, Skanska, and Hensel Phelps top BD+C's ranking of the nation's largest laboratory general contractors and construction management (CM) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report.
Contractors | Nov 28, 2023
Swinerton’s special projects units allow the national GC to operate like a local boutique firm
Swinerton’s Carolinas Division has been particularly successful in attracting jobs that require a nimble touch.
Engineers | Nov 27, 2023
Kimley-Horn eliminates the guesswork of electric vehicle charger site selection
Private businesses and governments can now choose their new electric vehicle (EV) charger locations with data-driven precision. Kimley-Horn, the national engineering, planning, and design consulting firm, today launched TREDLite EV, a cloud-based tool that helps organizations develop and optimize their EV charger deployment strategies based on the organization’s unique priorities.
Market Data | Nov 27, 2023
Number of employees returning to the office varies significantly by city
While the return-to-the-office trend is felt across the country, the percentage of employees moving back to their offices varies significantly according to geography, according to Eptura’s Q3 Workplace Index.
Resiliency | Nov 27, 2023
All levels of government need to act to cope with climate-driven flooding and sea level rise
The latest National Climate Assessment highlights the need for local, state, and federal governments to adopt policies to mitigate the effects of climate-driven flooding and sea level rise, according to a policy expert with the National Resources Defense Council.
Contractors | Nov 27, 2023
A Minnesota GC offers workers Wellness Pods as a mental health option
A maternal need sparked this idea for Gardner Builders.
Cultural Facilities | Nov 21, 2023
Arizona’s Water Education Center will teach visitors about water conservation and reuse strategies
Phoenix-based architecture firm Jones Studio will design the Water Education Center for Central Arizona Project (CAP)—a 336-mile aqueduct system that delivers Colorado River water to almost 6 million people, more than 80% of the state’s population. The Center will allow the public to explore CAP’s history, operations, and impact on Arizona.
