According to a recently conducted Associated Builders and Contractors (ABC) member survey the Construction Backlog Indicator (CBI) rebounded slightly in December to a reading of 7.3 months, an increase of 0.1 months from November’s reading. The ABC Construction Confidence Index (CCI) readings for sales, profit margin and staffing levels also increased in December. With the sales index climbing above the 50-point level threshold, indicating contractors anticipate sales growth over the next six months. The staffing level index increased to a reading of 56.3 but still remains far below the December 2019 reading. The index reading for profit margins remains well below the 50-point threshold. In prepared remarks for the release of the survey, ABC Chief Economist Anirban Basu said, “While many contractors enter 2021 with significant trepidation, the most recent backlog and confidence readings suggest that the onset of vaccinations has generally led to more upbeat assessments regarding nonresidential construction’s future. Backlog is down substantially from its year-ago level and profit margins remain under pressure, yet many contractors expect to enjoy higher sales and to support more staff six months from now.” Basu concludes, “The baseline expectation is that by the spring, the U.S. economy will blossom. With many households sitting on mounds of savings and sustaining pent-up demand for many goods and services, the U.S. economy is set for rapid growth as it reopens more fully during mid to late 2021. While it will take time for that to fully translate into new construction projects, some that were postponed earlier during the pandemic are likely to come back to life over the next several months. That should help many contractors begin to rebuild backlog, and to eagerly await 2022.”
FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.
Contractor Optimism Improves as ABC’s Construction Backlog Inches Up in December