Jim Haughey is the Chief Economist for Reed Construction Data.

Jim has over thirty years experience as a business economist, including twenty years monitoring the construction market. He has previously worked in government, corporate and consulting roles and has taught at the University of Michigan, Ohio University, Michigan State University and the University of Massachusetts. He has a Ph.D. degree in economics from the University of Michigan.

Construction Industry Forecasts

Notes from Jim Haughey

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Contractor Survey: Work backlog rises in 2nd Q but may fall in the summer
Jim Haughey, RCD Chief Economist
Aug 15, 2011

The spring rise in construction work backlogs is consistent both with the small gain in spring construction spending reported by the Census Bureau and with the value of starts pickup reported by Reed Construction Data in May and June. The slimmed down contractors that survived the recession are now operating with a backlog of work in the low end of the average range.

The plunge in economic growth from the 3% level to less than 1% early in 2011 has not yet caught up with construction starts or forced delays or cancellations in projects already started. But this is inevitable during the summer quarter even though aggregate spending in the economy appears to have partially recovered since mid-June.  Construction work backlogs are expected to be steady or slightly lower in the summer quarter.

The ABC survey also reported that backlogs were the highest and showed the most growth in the South. This is not surprising. The South was the more vibrant construction region before the recession and has resumed the same position. Backlogs were the lowest in the Midwest although they are now increasing modestly in an environment with high vacancy rates and constrained public finances.

Backlogs in the commercial/institutional building sector jumped from 7.3 to 8.6 months. More private work was fueled by improved net operating profit prospects for buildings intended to be leased.  More public and institutional work was fueled by the tail end of the stimulus program. However, backlogs dropped 18% from the first quarter for heavy (nonbuilding) projects. This was due to the early phase out of infrastructure stimulus funds, the failure to boost federal funding and spending cutbacks at by state and local governments.

Jim Haughey Post Archive

08/09 - Modest construction recovery will be supported by two more years of cheap credit
07/29 - Sour economic growth report threatens construction recovery
07/27 - Worry about the deficit not the debt limit
07/27 - Worry about the deficit not the debt limit
07/27 - Worry about the deficit not the debt limit
07/19 - Housing starts rebound.6% in June after two weak months
07/18 - Congress prepares to postpone resolving the deficit crisis assuring an extended period of subpar eco
07/12 - House Transportation Committee proposes to keep federal highway funding at fuel tax receipt level
07/09 - Don’t count on debt limit deal to restart sustained high economic growth
07/08 - Contractors cut 9,000 jobs in June
07/05 - The cost and frustration of selling a home contributes to the delayed housing recovery
07/05 - May construction spending down 0.6%; recovery still on hold
07/01 - FAA stops works on federally funded runway and control tower projects
06/21 - It is not more jobs that will quicken the economic recovery
06/16 - Mays’ 3.5% gain in housing starts does not signal a housing recovery immediately ahead
06/15 - Cautious spending threatens to delay construction recovery
06/10 - Economic and construction recoveries will be subpar for at least another year
06/09 - NYC construction unions may agree to drop expensive work rules to spur more work
06/04 - Contractors add 2,000 jobs in May; overall job gain disappointingly low
05/25 - No consensus for 2nd quarter GDP growth
05/17 - Housing starts drop 11% in April; single family outlook worsens
05/16 - Debt limit reached; public construction funding cuts will follow
05/11 - Consumer willingness to spend not lessened by recession
05/10 - Have commodity prices peaked?
05/06 - Contractors hire 5,000 workers in April
05/02 - Construction spending increases 1.4% in March
04/28 - US Economic growth slows abruptly in winter quarter
04/21 - Big Texas budget cuts show strength of revolt against public spending
04/19 - State tax receipts rising quickly but remain below pre-recession level
04/19 - Housing market rebounds in March
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