Associated Builders and Contractors’ (ABC) inaugural Construction Backlog Indicator (CBI)—a new national economic assessment of the U.S. commercial and industrial construction industry—revealed backlog rebounded to 6.3 months in May 2009, up from 6.2 months in April.
The CBI is still down by roughly 0.8 months since November 2008, when ABC began collecting data. During the past seven months, nonresidential backlog was down by an average of 24 days.
This new data is the only reliable economic indicator offering this level of specificity for the U.S. commercial and institutional, industrial and infrastructure construction industries. ABC will compile backlog data continually, releasing a new CBI every other month to track industry trends.
“We have developed this innovative measurement not only to track the level of commercial and industrial construction activity, but also to look into the future for signs of recovery,” says ABC Chief Economist Anirban Basu. “Significantly, we are able to track by region, sector and company revenue to paint a picture of this critical part of the American economy on an ongoing basis.”
Regional Highlights
Nationally, the average backlog from November 2008 to May 2009 declined nearly 1.3 months in the Northeast and 1.2 months in the South. However, backlog is up 0.4 months in the Middle States and is 0.2 months higher in the West.
Compared to April, the average backlog in May rose in each of the four regions monitored, with the exception of the South, which despite declines, still reports the longest average backlog. The Northeast reports the shortest average backlog at 5.3 months.
The most severe retrenchment for contracting activity in recent months has been along the East Coast and in the South. This comes as little surprise, according to Basu, because these areas are home to a significant share of the rapidly declining white-collar sectors, including financial and professional services.
In contrast, the Middle States, which depend more on commodities and energy supply, have been considerably more stable. Several large firms in the western United States have reported significant increases in their respective backlogs in recent months.
Industry Highlights
Average backlog in the infrastructure category jumped from 6.6 months in April to 8.6 months in May.
Backlog declined in the commercial/institutional and heavy industrial categories. Between November 2008 and May 2009, each category lost at least one full month of backlog, falling 1.4 months for industrial and one month for commercial/institutional.