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Construction Backlogs Stagnant in Fourth Quarter

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After gaining ground earlier in the year, average construction backlogs remained stagnant in the final quarter of 2012, according to quarter-to-quarter data compiled by the Washington, D.C.-based Associated Builders and Contractors (ABC). Nevertheless, backlogs are up 2.4% as compared to the same period last year.

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Fourth-quarter averages reflected a variety of conditions, including “fiscal cliff fears, highly constrained public capital budgets and lackluster macroeconomic growth,” says ABC Chief Economist Anirban Basu. “However, backlogs did not decline, suggesting that nonresidential construction spending is likely to remain flat during the initial months of 2013 and then possibly trend higher during the latter part of the year.”

While backlogs rose in the fourth quarter in the Northeast and South, they slipped in the West and Midwest, to 7.83 months and 6.61 months, respectively.

By comparison, backlogs averaged  8.21 months in the Northeast and 8.91 months in the South.

Declines in the Midwest “may be attributed to a loss of momentum in industrial production during the latter part of 2012,” says Basu. “However, given America’s growing appetite to produce, the Middle States appear positioned for continued gradual recovery during the next year.”

Year-over-year comparisons show growth in all regions except the South, where backlogs declined by a modest .01 months. Additionally, all three industry segments logged increases in backlogs compared to the same period a year ago, with the largest increase in the infrastructure segment, which gained 0.63 months.

“The year-over-year expansion in infrastructure is reflective of growing construction spending in categories such as power, utilities and transportation,” says Basu


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