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Construction Back Log Indicator – Construction Economy Showing Some Signs of Life

12/2/2013 | Construction Blog

The Construction Back Log Indicator, a national economic measurement maintained by the Associated Builders and Contractors, has released its third quarter numbers. While chief economist Anirban Basu was cautiously optimistic that the economy’s gradual recovery remains underway, his analysis also contained some sobering elements.

Non-residential construction spending remains unchanged. Basu believes that this is a positive indicator that the down turn in the construction industry has ended. He also projects, based on the current data, that most of the growth next year will occur after the first quarter. These estimates are highly contingent on resolution of federal budgetary problems and the willingness of politicians at the federal and state levels to successfully negotiate a number of difficult issues though.




The rate of the economic recovery has been slowed by a number of politically driven issues. Higher tax rates, rising interest rates, the federal shutdown, and uncertainties associated with health care reform, sequestration, and debt default have made businesses very cautious. The decision by the IMF to downgrade the United States growth forecast in October also contributed to the less than rosy long term projections.

Some economists had projected a 2.8% increase in non-residential construction from October 2012 as compared to October 2013 might spur a rapid acceleration in non-residential construction that simply has not materialized. Because so much uncertainty remains in the market, the order of the day is still slow and steady growth.