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Midwest Backlogs 'Remain Stifled,' ABC survey finds

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Due to poor gains in industrial production, the Midwest continued to lag other U.S. regions in average backlogs, or the amount of construction work under contract, during the first quarter of 2012, according to a newly released survey by Washington, D.C.-based Associated Builders and Contractors (ABC).

Midwest backlogs averaged 6.34 months for the third quarter, as compared to a 8.88 months in the South, where backlogs are the longest in the nation due to the “rapidly expanding, commodity-rich states” in the region, says ABC Chief Economist Anirban Basu.

“Construction backlog expansion in the Middle States continues to be stifled,” he says. “Gains in industrial production have been sporadic during the past year – too scattered to induce the next wave of manufacturing-related construction projects.”

The national picture is even grimmer. During the first quarter, average backlogs nationwide slid 5.4%  from the previous quarter, from 7.8 months to 7.4 months. Although the figure is slightly larger than backlogs for the first quarter of 2011, it marks a second-consecutive quarter of declines. “The lull in non-residential construction momentum is not poised to end in the immediate term,” says Basu. “Construction will remain soft during the summer months, with flat to declining spending.”

Stalled growth is not only linked to “the period of economic weakness that developed in broader economy last year, but concerns regarding export growth due to recessionary forces in Europe,” Basu says.

First-quarter results indicate that the average construction backlog for commercial, institutional and heavy-industrial projects declined by less than half a month nationwide. Infrastructure backlogs declined by .52 months.

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