By Jack Keough
Associated Builders and
Contractors (ABC) today reported that its Construction Backlog Indicator (CBI)
remained unchanged at 8 months from the third quarter through the fourth
quarter of 2012; however, it is up 2.4% compared to a year ago. CBI is measured
in months and reflects the amount of construction work under contract, but not
yet completed by nonresidential contractors.
“CBI failed to rise
during the fourth quarter of last year, a reflection of numerous factors,
including fiscal cliff fears, highly constrained public capital budgets and
lackluster macroeconomic growth,” said ABC Chief Economist Anirban Basu.
“However, backlog did not decline, suggesting that nonresidential construction
spending is likely to remain flat during the initial months of 2013 and then
possibly trend higher during the latter part of the year.
“There are myriad sources of risk to the
nonresidential construction outlook, including automatic sequestration, which
likely would result in a pullback in federally financed construction projects,”
Basu said. “As the president and Congress struggle to agree on ways to reduce
the federal government’s large deficits, this debt presents major issues for
contractors in the form of higher future interest rates and slower long-term
The report also said:
backlog rose from the third quarter to the fourth quarter of 2012 in the
Northeast and the South, while slipping in the Middle States and West.
- The South reports
the lengthiest backlog of any region at 8.91 months, but has not improved
during the past year (8.92 months during the fourth quarter of 2011).
backlog in the West rose by 1.72 months in 2012—the most significant
increase among all regions.
Associated Builders and Contractors (ABC) is a national
association with 72 chapters representing 22,000 merit shop construction
contractors and construction-related firms.
Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at firstname.lastname@example.org or email@example.com
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