Third-quarter Midwest construction backlog rises

The construction backlog in the Midwest increased 7.2 percent to 6.97 months during the third quarter, compared to 6.5 months in the same period of 2011, according to the Associated Builders and Contractors's latest Construction Backlog Indicator.

The CBI is a forward-looking economic indicator measuring construction work under contract for completion. According to the ABC, the higher the backlog, the more comfortable contractors are with their near-term financial picture. Lower backlogs indicate contractors are running out of work and could be struggling to secure additional sources of future revenue.

Despite the third-quarter backlog increase, the Midwest, which includes Missouri, lagged behind the three other regions in the U.S. At 8.93 months, the West had the highest backlog in the country last quarter, followed by the South, at 8.45 months, and the Northeast, at 7.62 months. Only the South region experienced a third-quarter drop in backlog - to 8.45 months from 9.41 months in the same quarter last year, according to the release.

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The average U.S. backlog increased 3.5 percent to 8 months in the third quarter.

“While the nation’s nonresidential construction activity is likely to remain subdued as we approach the final months of 2012, the CBI is signaling that nonresidential construction spending will accelerate by mid-2013,” ABC Chief Economist Anirban Basu said in the release. “However, this presumes the nation does not tumble over the fiscal cliff, a series of spending cuts and tax increases that kick in at the end of the year.

“The recovery in construction backlog, and in overall construction spending, would likely be more rapid today if not for the elevated level of uncertainty facing economic decision makers."[[In-content Ad]]