Construction backlog rose 3.2 percent in September compared to August, but is still down compared to November 2008, according to ABC’s Nov. 16 Construction Backlog Indicator (CBI). Backlog reached 5.9 months in September from 5.68 months in August.
“While the CBI edged higher in September, backlog generally remains uncomfortably small, particularly for firms in the heavy industrial category,” said Anirban Basu, ABC’s chief economist. “With the exception of firms operating in the infrastructure category, overall backlog remains weak.”
On a monthly basis, the average backlog for all regions except the South saw an increase. Middle States was the only region to post a higher backlog compared to November 2008, when ABC first started collecting data, but it still has the lowest overall backlog out of the four regions.
“Although the Middle States category includes economically beleaguered states such as Michigan and Ohio, there is also a group of states that continues to enjoy low unemployment rates and more stable construction activity, including Minnesota, North Dakota and South Dakota,” said Basu.
The heavy industrial category has the shortest backlog out of the three industry segments ABC monitors at 4.5 months. Infrastructure is the only industry segment with a higher backlog compared to November 2008, but it has declined for the past two months.
“Privately financed construction continues to be weak, which is reflected in still stagnant backlog within the commercial and institutional, and heavy industrial categories,” said Basu. “Despite the length of infrastructure backlog, the steady decrease in this category is worrisome and may be a reflection of the post-stimulus decline in infrastructure spending due to tight private credit.”
Companies with less than $30 million in revenue saw their respective backlogs increase 1.8 percent from August to September, while companies with annual revenues of $30 million to $50 million rose 13.2 percent on a monthly basis. Companies with annual revenues exceeding $100 million continue to see a decline, falling 8.2 percent in September. Companies in all revenue categories are down compared to November 2008 except those with annual revenues between $50 million and $75 million.
To view the entire CBI report including charts and graphs and methodology, click
here.