Dive Brief:
- The backlog of nonresidential construction projects during the second quarter of 2015 rose by 1%, to 8.5 months, the Associated Builders and Contractors reported Wednesday in the Construction Backlog Indicator.
- The report — which tracks projects that are under contract but not yet completed — followed a 3.2% decline during the first quarter of this year, which the ABC attributed to harsh winter weather and the effects of the West Coast ports slowdown delaying major projects.
- The backlog for the second quarter is nearly unchanged from the same period last year, which the ABC said is "indicative of an ongoing recovery in the nation's nonresidential construction industry."
Dive Insight:
Broken down by sector, the report noted that heavy industrial construction led the backlog increase, rising by 7.6% between the first and second quarters. Backlog in the sector hit its highest mark since the ABC began tracking the data, as it reached seven months for the first time.
The infrastructure sector, however, saw its backlog slide by 1.1% between the two quarters due to the fact that it "remains hamstrung by uncertainties lingering around the Highway Trust Fund," ABC Chief Economist Anirban Basu said in a release.
Basu added that although the construction backlog was "uneven" among nonresidential sectors, he is optimistic about future quarters.
He pointed to recent growth in the residential industry, which tends to precede growth in the nonresidential sector. "To the extent that remains true, the recent uptick in residential starts should translate into more commercial starts going forward," he said.
Still, uncertainty regarding funding for major infrastructure projects is likely to continue to hinder stronger growth in the industry's backlog until a permanent solution is put in place.
