ABC Releases March Backlog, Confidence Numbers
Last week, the Associated Builders and Contractors released its March Construction Backlog Indicator numbers, reporting that the backlog fell to 7.8 in March from the 8.2 that was recorded in February.
“There are two countervailing forces influencing backlog,” the ABC said. “On the one hand, design work on new projects declined during most of the pandemic. Some of this is attributable to the need to socially distance, risk aversion and the jarring effects of the crisis on commercial real estate. The result has been fewer projects presently available for bid, which is consistent with declining backlog.”
The backlog fell in most categories over the past month, including:
The backlog did gain in a few sectors, including the heavy industrial industry (from 6.5 to 8.5); in the South (from 8.0 to 8.3) and in companies at $30-50 million (from 6.9 to 7.9).
However, despite the slip in backlog, contractor confidence as continued to rise. ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels increased in March. All three indices remain above the threshold of 50, indicating expectations of growth over the next six months.
“On the other hand, the surprisingly strong economic recovery has brought projects that seemed dead back to life,” said the ABC. “The boom in e-commerce and other tech segments has also produced greater levels of demand for construction of fulfillment and data centers. The overall result is that backlog is roughly where it was six months ago. Given that contractors remain confident regarding sales, employment and profit margins over the balance of the year, the expectation is that more projects will enter the design phase, bidding opportunities are set to rise and, at some point, backlog will reestablish an upward trajectory.”
Previous ABC Numbers
At the end of March, the ABC released an analysis of U.S. Bureau of Labor Statistics data has revealed that, in 2021, construction companies will need to hire 430,000 more workers than what they employed in 2020.
According to economic estimates, construction spending is likely to reach $1.45 trillion in 2021, up 1.3% from 2020. Assuming this occurs, employment demand will increase by 430,000 this year from actual employment of 7.829 million in 2020.
“According to forecasts analyzed during the COVID-19 pandemic, an impressive 430,000 more construction workers still need to be hired in 2021 to meet the demand, evidence that the construction industry is powering America’s recovery and economic engine,” said ABC President and CEO Michael Bellaman.