ABC Construction Backlog Indicator Up 8.9%; Nonresidential Construction Industry May Have Hit Bottom

Associated Builders and Contractors (ABC) reported that the nation's Construction Backlog Indicator (CBI) for July rose 8.9 percent to 6.1 months from 5.6 months in June. The CBI is a gauge on the amount of construction work to be completed, measured in time, currently under contract.

"While the magnitude of monthly increase was significant and impressive, June was the lowest point for the CBI since ABC began collecting national data in November 2008. At that time, the CBI stood at 7.1 months, or 14 percent above its current level of 6.1 months," says ABC chief economist Anirban Basu. "The July data strongly reflect the effects of the stimulus package signed into law in February on the commercial, institutional, industrial and infrastructure construction segments," says Basu. "In the months ahead, we expect higher levels of actual construction spending, a welcome sign for the industry and the economy at large, and an indication that the downturn may be over for the nonresidential construction industry, though not all segments."