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ABC: Construction backlog grows in March, a sign of strong demand

Work piled up for construction companies in March amid a strong economy, according to an indicator of backlogged work from the trade group Associated Builders and Contractors of America.

ABC’s Construction Backlog Indicator increased to 9.5 months nationally in March 2019, up 8.8% from the month before. In the Midwest, the backlog grew at a slower pace, going from 7.2 to 7.4 months, an increase of 2.2%.

The growth in the construction backlog is a sign of a strong U.S. economy, said ABC Chief Economist Anirban Basu.

Basu said in a statement that although indicators in other industries show confidence is slipping, nonresidential contractors have remained optimstic about the direction of the economy. One exception, however, is in industrial contracting, for which the backlog fell sharply from 7.3 months in February to 5.6 months in March — a drop of 23.3% drop.

“Nonresidential construction spending activity lags the overall performance of the U.S. economy by 12-18 months. Accordingly, the typical nonresidential contractor has little reason for concern until 2020,” Basu said. “Other businesses, including retailers, are more likely to be immediately impacted by macroeconomic performance.

“In any case, nonresidential construction backlog has seldom been higher in the history of the series,” he said. “The implication is that those looking for employment in construction, especially in the skilled trades, will continue to find considerable demand for their services.”

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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