Construction equipment

Construction arrears decline as labor and supplies remain tight: ABC

The Associated Builders and Contractors Construction Backlog indicator fell to 7.6 months in September, according to a survey conducted by ABC members from September 20 to October 4. The reading is down 0.1 months from August 2021, but up 0.1 months from September 2020.

Readings of ABC’s Construction Confidence Index for sales, profit margins and staffing levels each declined in September, but remain above the 50 threshold, indicating growth expectations over the years. next six months.

“The non-residential construction backlog has shrunk for a second consecutive month as skills and input shortages hit the sector,” Chief Economist Anirban Basu said in a statement. “A growing number of contractors are reporting shortages of materials such as copper and PVC pipe.

“Input prices also continue to rise as disruptions to the global supply chain persist,” he said. “Rising shipping and trucking costs are making the situation even worse by putting additional upward pressure on input prices. In conjunction with the resulting skills shortages and higher wages, rising input prices lead to high bids, prompting some project owners to delay work and even cancel projects altogether in some cases.

“The good news is that demand for construction services remains high,” Basu said. “A lot of projects, be it healthcare, public education or data management, need to move forward, and the data indicates that this is disproportionately benefiting the biggest entrepreneurs. For the most part, recent declines in the order book have been recorded among small construction companies. Low interest rates and abundant liquidity have enabled many investors to deploy substantial capital, which helps support investment in real estate and construction projects.

“Despite all the challenges facing the non-residential construction industry, contractors collectively expect sales, personnel and profit margins to increase over the next six months, although the level of confidence has waned. in recent months, ”Basu said.

Source: ABC

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