South Still Leading Nation in Commercial Projects Backlog

The Association of Builders and Contractors reports that the Southern region, which includes Arkansas, had a construction backlog of 8.92 months in the fourth quarter, the nation’s highest and up 14.7 percent from a year earlier.

The ABC’s Construction Backlog Indicator, released Feb. 14, showed a nationwide backlog of 7.8 months, down 3.2 percent from the third quarter but still up 10.9 percent from the fourth quarter of 2010.

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 latest CBI numbers indicate a degree of stalling in the recovery of the nation’s nonresidential construction industry, likely due to a combination of the soft patch that developed in the broader economy early last year, a number of seasonal factors and the winding down of federal stimulus projects,” ABC chief economist Anirban Basu wrote in the report.

However, the latest figures “reflect the ongoing expansion of privately funded construction activity as opposed to the contraction of publicly funded construction,” he wrote. This shift is likely to benefit smaller construction firms, he added.

Basu cites the South’s central role in the nation’s energy industry as a key factor in backlog growth.