ABC index shows positive signs
The forward-looking CBI gauges the amount of construction
work under contract and expected to be completed in the future.
The latest Construction Backlog Indicator index from the Associated Builders and Contractors shows possible positive trends for the industry.
The index showed a 4.5 percent increase in backlog orders up to 6.07 months long for the first quarter of 2010.
The figures are up from a 5.81-month backlog in the fourth quarter of 2009. From February to March, the index rose 17 percent.
The forward-looking CBI gauges the amount of construction work under contract and expected to be completed in the future.
"The fact that the CBI is on the rise illustrates that the improvements recently seen in various other indicators, including construction spending, will continue through much of the balance of 2010," said Anirban Basu, the association’s chief economist. "However, the overall impact of the recession may not be at an end or approaching an end. It remains too soon to tell whether the current momentum will continue through 2011.
"As an indicator, the nonresidential construction industry tends to lag the overall economy by 12 to 24 months. With the broader economy having been in recovery for the better part of a year, and with stimulus spending still having an impact, the expectation is that for now, backlog will remain stable or better in the months ahead," Basu said. "Still, there are many forces at work that suggest that the sector's recovery may not be sustained as stimulus monies are steadily drawn down and commercial construction remains weak due to high vacancy rates and tight credit.”
The latest Construction Backlog Indicator index from the Associated Builders and Contractors shows possible positive trends for the industry.
The index showed a 4.5 percent increase in backlog orders up to 6.07 months long for the first quarter of 2010.
The figures are up from a 5.81-month backlog in the fourth quarter of 2009. From February to March, the index rose 17 percent.
The forward-looking CBI gauges the amount of construction work under contract and expected to be completed in the future.
"The fact that the CBI is on the rise illustrates that the improvements recently seen in various other indicators, including construction spending, will continue through much of the balance of 2010," said Anirban Basu, the association’s chief economist. "However, the overall impact of the recession may not be at an end or approaching an end. It remains too soon to tell whether the current momentum will continue through 2011.
"As an indicator, the nonresidential construction industry tends to lag the overall economy by 12 to 24 months. With the broader economy having been in recovery for the better part of a year, and with stimulus spending still having an impact, the expectation is that for now, backlog will remain stable or better in the months ahead," Basu said. "Still, there are many forces at work that suggest that the sector's recovery may not be sustained as stimulus monies are steadily drawn down and commercial construction remains weak due to high vacancy rates and tight credit.”
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