Construction Projects Backlog Good News for Southern States
by May 27, 2012 10:32 pm 83 views
A quarterly report from the Association of Builders and Contractors shows the South “continues to be the top performer in terms of producing new opportunities for contractors,” chief economist Anirban Basu wrote.
The ABC’s Construction Backlog Indicator released May 15 reported the South, which includes Arkansas, again had the lengthiest backlog of all U.S. regions, at 8.88 months, in the first quarter this year.
The indicator measures the amount of nonresidential 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.
Compared to the first quarter of 2011, construction backlog is slightly higher in every region except the Northeast, which dropped 0.47 months to 6.87.
The Midwest has the shortest backlog, at 6.34 months.
Because of positive economic data regarding consumer spending, including retail sales, Basu expects to see “continued momentum” in commercial construction activity.
“Institutional construction also continues to grow due to the ongoing expansion of the nation’s health care industry,” he wrote.
Mid-sized contractors, with revenue between $30 million and $50 million, are most likely to benefit from the rebound in commercial construction, Basu wrote.
On the other hand, larger firms will be hampered by stagnant backlog in the infrastructure and heavy industry categories.