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05/16/2012

Commercial construction appears down, ABC report says

The backlog of commercial construction projects nationwide declined to an average 7.4 months in the first quarter from the fourth quarter of 2011, the Associated Builders and Contractors said this week.

That means nonresidential construction could remain soft in the summer months, the organization said. Its construction backlog indicator is a forward-looking economic indicator that measures the amount of future construction work under contract. A drop means fewer projects are in the pipeline.

"The lull in nonresidential construction momentum is not poised to end in the immediate term," said Anirban Basu, ABC’s chief economist, in a statement. "The ongoing instability in the nation’s nonresidential construction industry appears to be related to the period of economic weakness that developed in the broader economy last year, as well as concerns regarding export growth due to recessionary forces in Europe. The result is that many prospective construction projects were cancelled or postponed."

The south region, which includes Texas, saw a slight increase in the backlog. It now takes 8.88 months to have a project started.

"Though average construction backlog in the South was roughly flat during the past quarter, backlog is up 0.72 of a month from one year ago. No other region has generated an increase in backlog that large," Basu said.

_ Sandra Baker

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