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Construction backlog rises to record high; Midwest firms left behind

A trade group’s database tracking construction projects that are now in the works shows companies throughout the country saw jobs pile up in record numbers in the second quarter of 2018.

The only exception was in Midwestern states, where there was a drop in companies’ construction backlog even as work increased elsewhere in the country.

The Associated Builders and Contractors’ Construction Backlog Indicator rose to its highest-ever point — recording 9.9 months worth of outstanding work — in the second quarter of 2018. That was a 14 percent increase from the same time last year and a 12.2 percent increase from the first quarter of 2018.

“Construction backlog has never been higher in the history of this series,” said Anirban Basu, ABC chief economist. “While contractors collectively reported a higher backlog, it was the industrial contractor segment that had the largest increase in the second quarter. With industrial production rising and factory capacity utilization recovering, there is more demand for both improved and new industrial space.

Contractors in southern states saw the largest backlog in the country, according to ABC’s analysis, recording 11.2 months worth of outstanding work, a figure that had increased by more than two months in the previous year.

The construction backlog in the Midwest, however, fell during the second quarter of 2018, going from 7.9 months in the same period of 2017 to 7.2 months this year. ABC placed the blame fro the slimming backlog in the Midwest partly on slow employment growth in cities such as St. Louis, Chicago and Detroit.

The expansion or sluggishness of certain industries may also influence where construction companies are seeing increases in their backlog of work. In Iowa and Nebraska, where economic development depends on agriculture, growth is slower than tech-reliant places like Silicon Valley.

“The disproportionate role played by technology companies in creating economic growth is also apparent in the data,” Basu said. “Contractors operating in tech-laden communities like San Jose, California; Seattle; Portland, Oregon; Provo/Salt Lake, Utah; and elsewhere continue to report very strong backlog.”

About Nate Beck, nbeck@dailyreporter.com

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).

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