Construction Backlog Grows 21% in Fourth Quarter

"The fourth quarter 2010 data shows that the economy is increasingly shifting toward private sector momentum and away from public sector dependence. Though the recovery remains well short of two years in duration, its positive impact on construction is becoming increasingly apparent,” Basu said. “Unfortunately, the outlook is not as bright for contractors that primarily work in the infrastructure segment. As federal stimulus-financed projects wind toward their inevitable conclusion, the expectation is that construction backlog in this category is likely to fall, bolstered by ongoing issues in state and local government finances, which hamstring capital spending."

Highlights by Company Size

• Firms of all size categories observed expanding construction backlog during last year’s fourth quarter compared to the third quarter.
• Those firms with revenue between $30 million and $50 million per year continue to report the smallest average construction backlog at 5.6 months, but are showing signs of improvement.
• Firms with annual revenue between $50 million and $100 million collectively reported an average construction backlog approaching 10 months, a significant improvement over the 8.5 month backlog recorded at the end of last year’s third quarter.

Company Size Analysis

"As recovery in the broader economy and nonresidential construction sector proceed, smaller firms are likely to begin to experience larger construction backlogs. This is the firm size category that stands to benefit the most from the shift toward private sector-led expansion,” said Basu. “In comparison, firms with annual revenues in excess of $100 million a year are diversified to the point that their construction backlog will improve regardless of either public or private sector expansion."

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