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Construction Backlogs Rise in All Regions But Midwest

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U.S. construction backlogs hit a post-recession high in the final quarter of 2013, a feat that eluded the majority of Midwest states, according to year-over-year data compiled by Washington, D.C.-based Associated Builders and Contractors (ABC).

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ABC's Construction Backlog Indicator (CBI) rose to 8.3 months in the fourth quarter, up from 8.2 months in the third quarter (+1.3%) and from 8 months at year end 2012 (+3.9%). By comparison, Midwest backlogs declined from 6.61 months to 6.40 months (-0.21%) in year-over-year comparisons, reflecting poor fundamentals in major metro markets such as Chicago and Detroit.

All other regions saw a rise for the same period, with the South logging 9.65 months in backlogs, the East 8.43 months and the West 7.91 months. Gains in the South were largely due to activity in Texas, Florida and Louisiana.

“The South continues to lead the way,” says ABC Chief Economist Anirban Basu. “States like Texas and Florida are adding population rapidly, helping to boost both residential and non-residential construction.” Basu noted that regional data can overshadow gains made in individual states. “For instance, strong performances from North Dakota and Minnesota have helped buoy Middle States,” he says.

ABC data indicate commercial and institutional construction logged the longest average longest backlog (8.91 months) in the fourth quarter, the result of job growth in professional and business services and expansion in select health care segments, ABC says.

Diminished funding from 2009's American Recovery and Reinvestment Act continues to hamper growth in infrastructure investment, while lackluster global demand has slowed growth in manufacturing.

CBI reflects the amount of construction work under contract, but not yet complete.


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