WASHINGTON — The Associated Builders and Contractors (ABC) announced that its Construction Backlog Indicator (CBI) reached an all-time high in the second quarter of 2014. The CBI improved 5.4 percent following a 2.8 percent decline in the first quarter. It currently stands at 8.5, up 3.6 percent on a year-over-year basis.
“The long-awaited brisk nonresidential construction recovery may be upon us,” said Anirban Basu, ABC chief economist. “Industry momentum was snuffed out by a seemingly endless winter, but the pace of industry recovery has been accelerating ever since. Backlog gains were nearly ubiquitous during the second quarter, with gains registered in every industry segment, in nearly all geographies, and for firms of virtually all sizes.
“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,” said Basu. “The nation has added roughly 2.5 million jobs over the past year, consistent with growing demand for space. Financing conditions have also improved, which should set the stage for more rapid nonresidential construction recovery in a number of key construction segments, including office (classified within commercial/institutional) and manufacturing (classified within heavy industrial) segments.”
The CBI is a leading economic indicator reflecting the amount of construction work under contract but not yet completed. The CBI is measured in months with a lengthening backlog suggesting expanding demand for construction services.
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Publication date: 8/18/2014