The Associated Builders and Contractors construction backlog indicator rose to 9 months during the first quarter of 2017, up 8.1 percent from the fourth quarter of 2016.
CBI is up by 0.4 months, or 4 percent, over the same quarter of last year, according to an ABC news release.
CBI is a leading economic indicator that reflects the amount of construction work under contract, but not yet completed. CBI is measured in months, with a lengthening backlog implying expanding demand.
“For the first time in the series’ history, every category registered quarterly growth in CBI. Among the big winners were firms in the western United States and those with annual revenues between $30 million and $50 million per annum,” said ABC Chief Economist Anirban Basu, in the release.
Regionally in the Midwest, higher oil and natural gas prices helped drive CBI higher. Backlog in the region expanded by 10 percent during the first quarter, and now stands at 8.5 months.
Numbers across the industry were up:
• The commercial/institutional segment backlog rose by more than 11 percent during the quarter, and now stands at nearly 9 months, matching its highest level since the third quarter of 2014.
• Average backlog in the heavy industrial category rose to 5.88 months, but remains well below levels registered during much of the history of the series.
• Backlog among firms with annual revenues of less than $30 million increased by 5.3 percent during the quarter.
• The largest firms, those with annual revenues above $100 million and which are disproportionately represented in the infrastructure category, report the lengthiest backlog at 11.8 months. This was up by more than 9 percent during the quarter. Backlog for this group is approaching the one-year mark, which is considered to be a sign of significant health.
According to the ABC, contractors have expressed concerns regarding construction conditions in 2019 or 2020 based on a number of factors: an already lengthy duration of the economic recovery, evidence of saturation in certain commercial real estate markets, weak momentum in numerous public spending categories and tightening monetary conditions.
However, Basu said the first-quarter 2017 CBI strongly suggests rumors of the business cycle’s demise are exaggerated.
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