Page 34 - BusinessWest January 20, 2021

Building Confidence
Construction Backlog Inches Up Nationally in December
onstruction may be on the upswing in Indicator rebounded modestly to 7.3 months “The baseline expectation is that, by the 2021, according to a report by Associated in December, an increase of 0.1 months from spring, the U.S. economy will blossom,” Basu Builders and Contractors (ABC). November’s reading, according to an ABC mem- said. “With many households sitting on mounds
“While many contractors enter 2021 with ber survey conducted from Dec. 18 to Jan. 5. The of savings and sustaining pent-up demand for
significant trepidation, the most recent backlog and confidence readings suggest that the onset of vaccinations has generally led to more upbeat assessments regarding nonresidential construc- tion’s future,” said ABC Chief Economist Anirban
backlog is 1.5 months lower than in December 2019.
ABC’s Construction Confidence Index read- ings for sales, profit margins, and staffing lev- els all increased in December. The sales index
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 dur- ing 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.”
The report comes on the heels of news that the construction industry added 51,000 net new jobs in December, according to ABC analysis of data released by the U.S. Bureau of Labor Sta- tistics. During the last eight months, the indus- try has added 857,000 jobs, recovering 79.1%
of the jobs lost during the earlier stages of the pandemic.
“The expectation remains that, as vaccina- tion proceeds, the U.S. economy is poised for
a significant uptick in growth during the latter half of 2021,” Basu said. “That will set the stage for improving industry performance in 2022 and beyond, particularly if the new administration is able to push forward an aggressive infrastructure stimulus package.” u
“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. “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.”
The organization’s Construction Backlog
climbed above the threshold of 50, indicating contractors expect to grow sales over the next
six months. The index reading for profit margins remained below that threshold. The staffing level index increased to 56.3 but remains well below its December 2019 reading.
BUILDING HISTORY
SINCE 1897
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Jennifer Adams
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