The commercial construction backlog in the United States reached its highest level in more than three years, with healthcare and industrial projects being two of the biggest drivers.
The nationwide backlog grew to 9.2 months in November, according to Associated Builders and Contractors, a Washington, D.C.-based trade group. That’s up from 8.8 months in October and the longest wait for starting a project since the second quarter of 2019. Much of the backlog comes from small contractors, those with less than $30 million in annual revenue.
The backlog is based on a survey of ABC members conducted between Nov. 21 and Dec. 6.
Developers continue to launch construction projects where they have already secured construction financing. But builders have also continued to win new contracts, which is “unexpected” amid rising inflation and the threat of a recession, according to Anirban Basu, ABC's chief economit.
“A number of contractors have been reporting that their backlog has risen rapidly over the past three months, which is counterintuitive given the pervasive view that the broader economy is headed into recession,” Basu said in a statement.
Construction on hospitals and other healthcare facilities is one of the largest segments of the current backlog, according to ABC.
Large industrial projects have also stimulated the backlog growth, with the semiconductor industry racing to take advantage of new federal incentives. Bechtel was selected last month as general contractor for Intel’s planned $20 billion worth of chip plants near Columbus, Ohio.
A surge of new projects tied to the electric vehicle and lithium-ion battery industries should also create more construction work in the coming months. Ford hired Walbridge in February for its planned $5.6 billion electric vehicle factory near Memphis, Tennessee.
Some publicly traded construction companies provide details on their backlogs. Fluor, based in Irving, Texas, said its third-quarter backlog rose 30% to $25.4 billion compared to the second quarter. And Dallas-based AECOM’s third-quarter backlog fell 2% to $40.2 billion in the same period.