Construction Backlog Rebounds in Third QuarterJanuary 2nd, 2017 | Category: Industry News
Construction backlog expanded during the third quarter, according to Associated Builders and Contractors’ (ABC) Construction Backlog Indicator (CBI).
The increase during the third quarter, led by strong growth in the commercial and industrial sector, follows two quarters of decline in backlog that led to speculation that growth in the country’s nonresidential construction industry was slowing.
“Despite growing concern that certain commercial segments in a handful of major U.S. cities are on the path to overbuilding, commercial construction backlog improved during the summer of 2016,” says ABC chief economist Anirban Basu. “The ongoing expansion of spending on healthcare has also helped to expand institutional construction volumes.”
However, he adds, “Exports have been sagging in the context of a disappointing global economic recovery and strong dollar. Business investment in the U.S. has been weak, though there have been more recent indications of improvement. This improvement was not fully apparent in third quarter data, and industrial construction backlog declined during the quarter.”
Basu says the biggest news is that infrastructure-related backlog is on the rise.
“Despite the passage of a federal highway bill in 2015 and a growing consensus that America’s expanding infrastructure deficits must be aggressively countered, infrastructure spending in America has been in decline for much of 2016,” he says. “… The rise in backlog suggests that this negative trend will soon turn positive.”