by Rebecca Walker — July 24, 2009—Associated Builders and Contractors (ABC) recently released its inaugural Construction Backlog Indicator (CBI), a forward-looking measurement reflecting the amount of work to be performed by contractors in the months ahead.
The CBI in the nation’s nonresidential construction industry rebounded in May to 6.3 months, up from 6.2 months in April, but still down by roughly 0.8 months since November 2008, when ABC began collecting data. During the past seven months, nonresidential backlog is down by an average of 24 days.
This new, national economic data set is the only reliable leading economic indicator offering this level of specificity focused on the U.S. commercial and institutional, industrial, and infrastructure construction industries, according to ABC. ABC will compile this data on an ongoing basis, releasing the latest CBI every other month to track industry trends.
Construction backlog is the amount of work, measured in dollars, that companies are contracted to complete in the future. A high backlog value (measured in months) indicates abundant work is due to begin in the near term, with predictable overall economic benefits. Conversely, a low backlog indicates fewer projects are under contract, leading to more uncertain economic impact. Excessively small backlogs mean contractors are running low on available work and need to identify and secure additional sources of future revenue.
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