Backlogs Trending Lower

Credit: Construction Dive

While several recent surveys show continuing confidence and optimism on the part of construction industry participants, backlog issues continue to advance.

In its most recent announcement on the subject, Associated Builders and Contractors reported confidence remains strong, but ABC Chief Economist Anirban Basu warned issues like materials shortages, protracted supply chain issues, rising input prices, higher transportation costs, labor shortages and other inflationary factors could see backlogs and confidence both fall.

Overall proposal activity is an early indicator of demand for new projects. A/E/C proposals in Q3 have fallen in 10 of the 12 major markets tracked by advisory firm PSMJ Resources, but it was still the strongest Q3 in the 18 years the company has tracked.

Assuming interest rates stay low and liquidity stays high, it is likely demand will remain at least relatively strong as long as rising costs do not take too major a bite out of projected margins. Smaller companies are those experiencing the most disruption, Basu says, leading to disproportionate benefits to large contractors. (Source)

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