Briefcase

Construction Backlog Falls 3.2% in 4th Quarter
WASHINGTON, D.C. — Associated Builders and Contractors (ABC) recently released its Construction Backlog Indicator (CBI) for the fourth quarter of 2011, which declined 3.2% from the previous quarter, from 8.1 months to 7.8 months, but is still up 10.9% compared to the fourth quarter of 2010. CBI is a forward-looking economic indicator that measures the amount of non-residential construction work under contract to be completed in the future. “Overall, the latest CBI numbers indicate a degree of stalling in the recovery of the nation’s non-residential construction industry, likely due to a combination of the soft patch that developed in the broader economy early last year, a number of seasonal factors, and the winding down of federal stimulus projects,” said ABC Chief Economist Anirban Basu. “But the good news is that, given the recent acceleration in economic and employment growth, CBI is positioned to rebound more forcefully during the quarters ahead. In addition, the most recent data reflect the ongoing expansion in privately funded construction activity as opposed to the contraction of publicly funded construction. Basu noted that the nation’s smaller construction firms are gaining an advantage from this shift, in contrast to the decreased construction activity among the larger firms that had benefited from earlier federal stimulus projects and military-base-realignment-related construction.” Regionally, the construction backlog expanded in the Northeast from the third quarter to the fourth quarter, but declined in the South and West, and was essentially unchanged in the middle states. Also, the construction backlog is higher in every region of the nation compared to one year ago. Companies in the south, some of which are located in high-growth states such as Louisiana, Oklahoma, and Texas, reported the lengthiest backlog at 8.9 months, up 14.7% from the fourth quarter of 2010. “The disparity between regional construction activity is on the rise,” said Basu. “One year ago, the difference in backlog between the South region, with the lengthiest backlog, and the West region, with the shortest backlog, was 1.98 months. During the fourth quarter of 2011, this gap rose to 2.81 months, with the South reporting a backlog of 8.92 months and the West at 6.11 months. The South appears to be the region most positively impacted by rebounding non-residential construction, largely due to its central importance to the nation’s energy industry.” Basu added that the West “continues to deal with many issues, including the impact of weak residential real-estate markets and stressed state fiscal conditions, both of which impact the vitality of broader regional economies.”

MMWEC, Utilities Receive Energy-efficiency Grant
LUDLOW — A first-time grant of $200,000 from the state Department of Energy Resources (DOER) will enable three municipal utilities and the Massachusetts Municipal Wholesale Electric Co. (MMWEC) to expand energy-efficiency programs for their commercial and industrial customers. Using the MMWEC energy-efficiency program model, the MMWEC member utilities in Westfield, Chicopee, and Ipswich received grants totaling $142,500, primarily to bolster customer-rebate programs that offset the cost of making energy-efficient improvements. MMWEC received a grant of $7,500 to promote its energy-efficiency program and assist municipal utilities with delivery of related customer services. “This grant is certainly a welcomed contribution to expanding the energy-efficiency services provided by these municipal utilities,” said MMWEC CEO Ronald C. DeCurzio. “We are hoping the allocation of these funds can be expanded in the future to benefit additional municipal utilities and their customers.” MMWEC coordinated the competitive grant-application process for its member utilities in Westfield, Chicopee, and Ipswich, while the Reading municipal utility also received funding for an energy-saving water-heating program. The MMWEC members will use the grants to increase rebates and energy-audit funding for commercial and industrial customers. Generally, the efficiency measures covered include improvements in heating and cooling, windows, boilers and furnaces, lighting, energy-monitoring systems, and insulation. The grants are funded through proceeds from the Regional Greenhouse Gas Initiative, a regional cap-and-trade, emissions-reduction program that has generated more than $150 million for Massachusetts through the sale of emission allowances. “Westfield is delighted to be among the first municipal utilities in Massachusetts to receive a grant from the DOER,” said Westfield Gas & Electric General Manager Daniel J. Howard. “We have worked hard at initiating a program for our commercial and industrial customers that promotes conservation and energy efficiency while expanding existing programs to our residential customers.” Chicopee Electric Light Manager Jeffrey R. Cady echoed those sentiments. “The DOER grant will enable Chicopee to move forward with expanding programs to better serve our customers and help meet our system needs with energy efficiency and conservation initiatives,” said Cady. “Using energy efficiently is essential in delivering a reliable and economic supply of electricity to Chicopee consumers. This grant will keep us moving in that direction.” MMWEC is a nonprofit, public corporation and political subdivision of the Commonwealth of Massachusetts that provides a variety of power-supply, financial, risk-management, and other services to the state’s consumer-owned municipal utilities.