FACILITIES MANAGEMENT SURVEYS

ABC Construction Backlog Indicator jumps 8.9 percent, nonresidential construction may have hit bottom

September 23, 2009—Associated Builders and Contractors (ABC) has reported that the nation's Construction Backlog Indicator (CBI) for July rose 8.9 percent to 6.1 months from 5.6 months in June. The CBI is a gauge of the amount of construction work to be completed, measured in time, currently under contract.

"While the magnitude of the monthly increase was significant and impressive, June was the lowest point for the CBI since ABC began collecting national data in November 2008. At that time, the CBI stood at 7.1 months, or 14 percent above its current level of 6.1 months," said ABC Chief Economist Anirban Basu.

"The July data strongly reflect the effects of the stimulus package signed into law in February on the commercial, institutional, industrial and infrastructure construction segments," said Basu. "In the months ahead, we expect higher levels of actual construction spending, a welcome sign for the industry and the economy at large, and an indication that the downturn may be over for the nonresidential construction industry, though not all segments."

ABC's CBI represents the only reliable leading economic indicator focused on the U.S. commercial, institutional, industrial and infrastructure construction industries at this level of detail. According to ABC. The indicator is published bi-monthly and data are collected from ABC members on an ongoing basis.

All three industry segments: commercial/institutional, heavy industrial and infrastructure reported an increase in backlog in July relative to June. However, among the three industry groups, only infrastructure has experienced an increase in average backlog since November 2008.

The infrastructure category backlog declined slightly in July compared to June, but still stands at 9.5 months, the best showing of any industry category.

CBI for both the commercial/institutional and heavy industrial segments remains below six months.

Associated Builders and Contractors (ABC) is a national association with 79 chapters representing 25,000 merit shop construction and construction-related firms with two million employees. For more information, see the Web site.

To download the latest CBI charts and graphs, and the CBI methodology, visit online.

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