Weather to blame for decline in Construction Backlog Indicator

Despite the backlog decline, continued job growth, low fuel prices, and wage gains are expected to lead to an increase in consumer spending.

June 02, 2015 |
Weather to blame for decline in Construction Backlog Indicator

The Construction Backlog Indicator fell by 3.2% during the first three months of 2015. Image: Pixabay

Following an intense winter season, the Associated Builders and Contractors' Construction Backlog Indicator (CBI) revealed a 3.2% decline during the first quarter of 2015. 

According to ABC, construction firms across the country reported a revenue-weighted average CBI of 8.4 months, 0.3 months below the final quarter of 2014. 

The Northeast saw its backlog decline by 10.2%, a change of 1.04 months from the fourth quarter of last year. The Middle States reported a 0.7% decline to 0.05 months in construction backlog and the West experienced a 25.3% drop or 1.88 months. The South was the only region to report an increase in construction backlog as it rose 5.9% or 0.55 months.

 

 

"Weather and a myriad of other factors always make the first quarter CBI difficult to interpret," said ABC Chief Economist Anirban Basu. "A brutal winter may have postponed project-related work, including the signing of contracts. The first quarters of 2012 and 2014 also experienced CBI declines that effectively were reversed during the ensuing second quarters."

Additionally, sharp reductions in oilfield investment affected companies in the Middle States while the West Coast port slowdown impacted firms on the western side of the country. However, the backlog should re-establish an upward trend as the year's warmer months approach and ports return to normal.

Despite the backlog decline, continued job growth, low fuel prices, and wage gains are expected to lead to an increase in consumer spending.

 

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