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Kallanish Kallanish

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October, 27th 2020

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SEP 16
19:42

US construction backlog indicator rises in August

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The Associated Builders and Contractors' (ABC) construction backlog indicator increased by 0.2 months from July to 8 months in August, Kallanish reports.

In a breakdown of the construction industry, the commercial and industrial sector increased by 0.2 months from July. Infrastructure increased by 0.4 months, while the heavy industrial sector fell by -0.3 months from the month prior. On-year, infrastructure remains up 0.4 months, whilst the commercial and institutional sector, as well as the heavy industrial sector, remain down -0.6 months and -0.8 months, respectively. In August, the ABC's construction backlog indicator is a half-month lower than levels in August 2019.

Prior to the gains in August, the construction backlog indicator was "...unequivocally negative, with contractors collectively indicating sharp declines in backlog and an expectation that both sales and profit margins would shrink in coming months," says ABC chief economist Anirban Basu.

In regards to an outlook, “...backlog and confidence are likely to be volatile during the month ahead,” predicts Basu. “Many projects have been postponed, yet if they are quickly brought back to life as economic recovery persists, backlog could begin to rise."

Of the four US regions, the South and the West experienced monthly gains of 0.4 months and 2.4 months. The middle states' construction backlog indicator decreased by -0.2 months, whilst the Northeast decreased by -0.7 months.