ABC reports that its Construction Backlog Indicator expanded to a record 9.9 months during the second quarter of 2018. Backlog is up 12.2 percent from the first quarter and 14 percent compared to the same time last year.
“Construction backlog has never been higher in the history of this series,” said ABC Chief Economist Anirban Basu. “While contractors collectively reported a higher backlog, it was the industrial contractor segment that had the largest increase in the second quarter. With industrial production rising and factory capacity utilization recovering, there is more demand for both improved and new industrial space. This was especially apparent among contractors in the southern United States, where backlog stands at 11.2 months and has increased 2.2 months over the past year.
“The disproportionate role played by technology companies in creating economic growth is also apparent in the data,” said Basu. “Contractors operating in tech-laden communities like San Jose, California; Seattle; Portland, Oregon; Provo/Salt Lake, Utah; and elsewhere continue to report very strong backlog. Given announcements of new, large-scale data centers and tech campuses, technology is positioned to be an ongoing driver of demand for construction services.
“During the first quarter we noted that there had been a significant uptick in survey participation that could have affected our findings due to shifting participant composition,” said Basu. “The second quarter was also characterized by elevated participation levels. It appears that higher participation is now the norm, and that the addition of survey participants has only served to render CBI a more reliable indicator.”