It’s Not Getting Any Easier Any Time Soon
Associated Builders and Contractors recently reported that its Construction Backlog Indicator remained unchanged at 8.0 months in February, according to a survey conducted across its nearly 15K contractor members.
How does this matter to telecom? You already know. Communications Service Providers (CSPs) are feeling today’s pains of deployment delays and higher costs.
The organization’s Construction Confidence Index readings for sales and staffing increased in February, while the reading for profit margins inched lower. All three indices remain above the threshold of 50, indicating expectations of growth over the next six months. (See Figure 1.)
“The level of demand for construction services is simply staggering,” said ABC Chief Economist Anirban Basu. “Despite sky-high materials prices, surging compensation costs, and attendant impacts on bids, many project owners continue to move forward with projects because they recognize construction costs could rise even further. There is also significant investment capital flowing through the economy in search of yield. Real estate projects often satisfy the need to deploy considerable capital quickly, but only if construction is permitted to move forward.
“Accordingly, despite elevated costs and workforce challenges, construction backlog remains stable,” said Basu. “Backlog would likely be rising rapidly if costs were more stable. Nonetheless, construction confidence indicators continue to improve. Collectively, contractors expect sales and employment to expand over the next six months. But what is far more remarkable is the expectation that profit margins will expand, indicating that demand for construction services remains elevated enough to countervail cost increases as we head into the heart of 2022.”
Despite sky-high materials prices, surging compensation costs, and attendant impacts on bids, many project owners continue to move forward with projects because they recognize construction costs could rise even further.
How does this matter to telecom? You already know. Communications Service Providers (CSPs) are feeling today’s pains of deployment delays and higher costs.
If you’re concerned about make your deadlines given these challenges, a solution could be reaching out to some new construction resources. With ABC’s annual top performers lists, their experts recommend you consult two categories to uncover a few new construction partners. (See Figures 2 and 3.)
ABOUT ABC
Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 69 chapters help members develop people, win work, and deliver that work safely, ethically, and profitably for the betterment of the communities in which ABC and its members work. To learn more, visit https://abc.org/ and follow them on Twitter @ABCNational.
