ABC’s Construction Backlog Indicator
(CBI) reached an all-time high in the second quarter of 2014, according to a report issued Aug. 19. After falling 2.8 percent in the first quarter, second quarter CBI improved 5.4 percent to reach 8.5 months. In addition, there were gains in every industry segment, in nearly all geographic regions and for firms of almost all sizes. ABC’s chief economist expects that trend to continue.
“Industry momentum was snuffed out by a seemingly endless winter, but the pace of industry recovery has been accelerating ever since,” said ABC Chief Economist Anirban Basu. “Further increases in construction backlog are likely given remarkably accommodative Federal Reserve policy even after five completed years of economic expansion, accelerated job growth and rising consumer confidence.”
Out of the four regions CBI measures, the South was the only region that experienced a quarterly decline. While the Northeast has the longest backlog in the country, the West experienced the largest growth in backlog over the past year and is now at its longest backlog in the history of CBI. The Middle States region, which is at its highest level since the end of 2012, is set for more rapid backlog recovery going forward.
Not only did backlog expand in all industry segments on a quarterly basis, all categories except infrastructure also experienced year-over-year increases. After falling in the first quarter, backlog in the commercial/institutional category rebounded to near its historic high and backlog in the heavy industrial category is at its highest level since the fourth quarter of 2012. Both segments are also likely to see continued improvement.
CBI by Firm Size
All firm categories except one enjoyed advancing backlog in the second quarter. The largest firm category, $100 million+ in annual revenue, registered a loss of half a month. However, industry recovery has broadened to include more small firms, with backlog rising in both the ‘revenue less than $30 million’ and ‘$30-50 million’ categories. Backlog among larger firms, between $50-$100 million in revenue, is the lengthiest at more than 11 months.
Read more analysis and see charts and graphs here
Producer Price Index Report
ABC Aug. 15 released its analysis of the producer price index (PPI) report by the U.S. Department of Labor. Overall, construction materials prices inched higher in July and are up 2 percent year over year, while nonresidential construction materials prices were flat for the month and are just 1.4 percent higher than at the same time one year ago.
Read more about PPI
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