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
Cladding and Facade Systems | Jun 5, 2023
27 important questions about façade leakage
Walter P Moore’s Darek Brandt discusses the key questions building owners and property managers should be asking to determine the health of their building's façade.
Retail Centers | Jun 2, 2023
David Adjaye-designed mass timber structure will be a business incubator for D.C.-area entrepreneurs
Construction was recently completed on The Retail Village at Sycamore & Oak, a 22,000-sf building that will serve as a business incubator for entrepreneurs, including emerging black businesses, in Washington, D.C. The facility, designed by Sir David Adjaye, the architect of the National Museum of African American History and Culture, is expected to attract retail and food concepts that originated in the community.
Mixed-Use | Jun 1, 2023
The Moore Building, a 16-story office and retail development, opens in Nashville’s Music Row district
Named after Elvis Presley’s onetime guitarist, The Moore Building, a 16-story office building with ground-floor retail space, has opened in Nashville’s Music Row district. Developed by Portman and Creed Investment Company and designed by Gresham Smith, The Moore Building offers 236,000 sf of office space and 8,500 sf of ground-floor retail.
Healthcare Facilities | Jun 1, 2023
High-rise cancer center delivers new model for oncology care
Atlanta’s 17-story Winship Cancer Institute at Emory Midtown features two-story communities that organize cancer care into one-stop destinations. Designed by Skidmore, Owings & Merrill (SOM) and May Architecture, the facility includes comprehensive oncology facilities—including inpatient beds, surgical capacity, infusion treatment, outpatient clinics, diagnostic imaging, linear accelerators, and areas for wellness, rehabilitation, and clinical research.
K-12 Schools | May 30, 2023
K-12 school sector trends for 2023
Budgeting and political pressures aside, the K-12 school building sector continues to evolve. Security remains a primary objective, as does offering students more varied career options.
Multifamily Housing | May 30, 2023
Boston’s new stretch code requires new multifamily structures to meet Passive House building requirements
Phius certifications are expected to become more common as states and cities boost green building standards. The City of Boston recently adopted Massachusetts’s so-called opt-in building code, a set of sustainability standards that goes beyond the standard state code.
Contractors | May 26, 2023
Enhanced use of data is crucial for improving construction job site safety
Executives with major construction companies say new digital tools are allowing them to use data more effectively to reduce serious safety incidents and improve job site safety.
Contractors | May 24, 2023
The average U.S. contractor has 8.9 months worth of construction work in the pipeline, as of April 2023
Contractor backlogs climbed slightly in April, from a seven-month low the previous month, according to Associated Builders and Contractors.
Mass Timber | May 23, 2023
Luxury farm resort uses CLT framing and geothermal system to boost sustainability
Construction was recently completed on a 325-acre luxury farm resort in Franklin, Tenn., that is dedicated to agricultural innovation and sustainable, productive land use. With sustainability a key goal, The Inn and Spa at Southall was built with cross-laminated and heavy timber, and a geothermal variant refrigerant flow (VRF) heating and cooling system.
Architects | May 23, 2023
DEI initiatives at KAI Enterprises, with Michael Kennedy, Jr. and Gyasi Haynes
Michael Kennedy, Jr. and Gyasi Haynes of KAI Enterprises, St. Louis, describe their firm's effort to create a culture of diversity, equity, and inclusion—and how their own experiences as black men in the design and construction industry shaped that initiative.
