Construction backlog slowing, ABC says
That is the opinion of Associated Builders
and Contractors surveyed for the group’s construction backlog indicator.
Construction activity remains slow, but there are some positive trends emerging.
Those are the opinions of Associated Builders and Contractors surveyed for the group’s monthly construction backlog indicator.
Among those asked, the construction backlog stood at seven months in June and 7.3 months in July – up 20.4 percent from July 2009, but down 1.2 percent from the index’s historic high of 7.4 months in April.
The indicator gauges the amount of construction work contracted to be completed in coming months.
"Construction backlog is no longer expanding despite the fact that backlog related to infrastructure continues to increase. This suggests that the recovery of privately financed activities remains slow," said Anirban Basu, the association’s chief economist. "There are no indications, however, that overall construction business volume has begun to shrink; merely that backlog is no longer advancing.
"The U.S. economic recovery is now roughly 12 months old. Nonresidential construction activities typically lag the overall economy by 12 to 24 months, with the implication that privately financed activities should soon begin to show signs of a rebound,” he added.
But how strong any rebound will be is highly uncertain.
"However, there are reasons to believe that this moment in economic history will be a bit different from other economic recoveries due to a number of factors, including still rising office vacancy rates in many parts of the nation, extraordinarily slow job creation, tight credit and fears that the economic recovery will not persist. Therefore, the future path of the CBI is a mystery because construction's recovery remains far from guaranteed," Basu said.
Construction activity remains slow, but there are some positive trends emerging.
Those are the opinions of Associated Builders and Contractors surveyed for the group’s monthly construction backlog indicator.
Among those asked, the construction backlog stood at seven months in June and 7.3 months in July – up 20.4 percent from July 2009, but down 1.2 percent from the index’s historic high of 7.4 months in April.
The indicator gauges the amount of construction work contracted to be completed in coming months.
"Construction backlog is no longer expanding despite the fact that backlog related to infrastructure continues to increase. This suggests that the recovery of privately financed activities remains slow," said Anirban Basu, the association’s chief economist. "There are no indications, however, that overall construction business volume has begun to shrink; merely that backlog is no longer advancing.
"The U.S. economic recovery is now roughly 12 months old. Nonresidential construction activities typically lag the overall economy by 12 to 24 months, with the implication that privately financed activities should soon begin to show signs of a rebound,” he added.
But how strong any rebound will be is highly uncertain.
"However, there are reasons to believe that this moment in economic history will be a bit different from other economic recoveries due to a number of factors, including still rising office vacancy rates in many parts of the nation, extraordinarily slow job creation, tight credit and fears that the economic recovery will not persist. Therefore, the future path of the CBI is a mystery because construction's recovery remains far from guaranteed," Basu said.
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