Construction Index Shows Strong Outlook for South

The Association of Builders and Contractors reports that while the nationwide outlook for commercial construction spending is flat, the picture for the South remains much rosier.

In fact, the outlook for the Southern region, which includes Arkansas, is 35 percent higher than a year ago, according to the ABC’s Construction Backlog Indicator for the third quarter of 2011.

The indicator measures the amount of construction work under contract to be completed in the future. A backlog of less than eight months is statistically associated with construction spending declines, while a backlog of more than eight months indicates future spending increases.

The report issued Nov. 15 shows a national backlog of 8.1 months, “consistent with flat construction spending,” ABC chief economist Anirban Basu wrote.

But the South’s backlog of 9.41 months is the largest of any region and the biggest gain of any region in the last year, he wrote.

In the third quarter of 2010, the South had a backlog of 6.98 months.

Basu attributed the growth to continuing “brisk” investment in the region, including in energy- and power-related industries.

Nationally, the sector seeing the most growth is infrastructure, despite the winding down of federal stimulus-funded projects.