)
Construction firms are still reporting backlogs longer than nine months on average, according to the latest report from Associated Builders and Contractors.
The average backlog of 9.2 months is flat from November, and the highest it has been since the second quarter of 2019, the national industry group found in a survey of its members between Dec. 20 and Jan. 5.
The nature of the backlog is shifting, however: infrastructure projects' backlog has grown from 6.7 months in November to 10 months in December, while the backlogs for commercial/institutional and heavy industrial projects each shrank. All three categories of construction are experiencing longer backlogs than they did in December 2021, according to the ABC.
“While 2023 continues to be filled with promise, contractors may soon show more concern,” ABC Chief Economist Anirban Basu said in a statement. “Anecdotal evidence suggests that financing commercial real estate projects is more difficult, due in part to recession predictions. The general increase in the cost of capital has also jeopardized many projects, with certain contractors noticing an increase in postponements.”
The backlogs create a runway for firms if a recession takes hold as many expect in 2023. Dodge Construction Network projects a 13% slowdown in commercial real estate construction this year.
But the growing backlog of infrastructure construction shows that the industry is being bolstered by federal spending, namely the Infrastructure Investment and Jobs Act, which provided about $110B in additional funding for roads, bridges and other types of transportation-related developments.
A major question as that funding has started to reach projects on the ground has been whether contractors can find enough labor. ABC's survey showed members have less confidence in their staffing levels in December than they did in November or last year.
)
)
)
)
)
)
)
)
)
)
)
)