The Construction Backlog Indicator (CBI) is a forward-looking national economic indicator that reflects the amount of work that will be performed by commercial and industrial contractors in the months ahead. This new, national economic data set is the only reliable leading economic indicator offering this level of specificity focused on the U.S. commercial and institutional, industrial, and infrastructure construction industries.
Backlog is the amount of work, measured in dollars, that construction companies are contracted to do in the future. The greater the value of the backlog, the more comfortable contractors can be with respect to their near-term economic circumstances. The smaller the value of the backlog, as a share of annual revenues, the less comfortable are the circumstances in which contractors are operating. Excessively small backlogs imply that contractors are running out of work and need to identify and secure additional sources of future revenues.
The measure is particularly timely given ongoing economic turbulence as well as initiatives designed to countervail economic weakness, including the American Recovery and Reinvestment Act of 2009.
This national assessment of construction backlogs is based upon a confidential, monthly survey sent to ABC member companies located throughout the U.S. These members are active in various nonresidential construction segments and the results are disaggregated by these segments. Each sample firm reported their respective revenues for FY 2007 when the survey was initiated in 2008.
The formula ABC uses to convert reported backlogs measured in dollars into months of available work is:
Current month’s level of backlogs (reported in dollars) ÷ Fiscal year 2007 revenues (base year)
× 12 = total months of forward-looking work under contract
To maximize the comparability of one month versus another, ABC has worked to maximize consistent reporting among survey sample participants. The effort has been supported by the longstanding relationships between ABC and its members, as well as carefully crafted communications with those responsible for responding to each monthly survey.
CBI survey participants are asked to provide information regarding the geographic source of their revenues. Companies indicate the percentage of work performed in each of four regions of the country: Northeast, South, Middle States and West. The composition of regions is as follows:
| Northeast | South | Middle States | West |
Maine
Vermont
New Hampshire
Massachusetts
Rhode Island
Connecticut
New York
Pennsylvania
New Jersey
Maryland
Delaware
District of Columbia
West Virginia
| Virginia
North Carolina
South Carolina
Georgia
Florida
Alabama
Louisiana
Mississippi
Tennessee
Kentucky
Texas
Oklahoma
Arkansas
| Ohio
Michigan
Wisconsin
Minnesota
North Dakota
South Dakota
Nebraska
Kansas
Missouri
Iowa
Indiana
Illinois | Montana
Wyoming
Colorado
New Mexico
Arizona
Utah
Idaho
Nevada
Washington
Oregon
California
Alaska
Hawaii
|
CBI survey participants also identify the approximate percentage of their company’s revenue performed in each of three construction segments/categories. These categories are:
Commercial and Institutional – construction related to office space, retail, malls, restaurants, hotels/convention centers, arenas, stadiums, construction related to hospitals, nursing homes, assisted living centers, K–12 schools, colleges/universities, military bases and government research centers;
Infrastructure – construction related to supply of water, wastewater disposition, power generation/distribution, roads/highways/bridges and telecommunications infrastructure; and
Industrial – construction related to manufacturing facilities, refineries, distribution centers, warehouse space and flex space.
CBI survey participants are asked to provide information regarding their company’s annual revenues. Using this data, firms are then placed into one of five revenue categories:
Less than $30 million;
$30 million-$50 million;
$50 million-$75 million;
$75 million-$100 million;
More than $100 million.