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Construction spending to stay flat

By , - Last modified: February 21, 2013 at 9:39 AM
File photo of an Allied Building Corp. construction projection for Liberty Property Trust last year.
File photo of an Allied Building Corp. construction projection for Liberty Property Trust last year.

Associated Builders and Contractors reported that its Construction Backlog Indicator remained unchanged at eight months from the third quarter through the fourth quarter of 2012; however, compared to a year ago, it's up 2.4 percent. CBI is measured in months and reflects the amount of construction work under contract, but not yet completed by nonresidential contractors.

"CBI failed to rise during the fourth quarter of last year, a reflection of numerous factors, including fiscal cliff fears, highly constrained public capital budgets and lackluster macroeconomic growth," said ABC Chief Economist Anirban Basu.

However, he said the backlog did not decline, suggesting that nonresidential construction spending is likely to remain flat during the initial months of 2013 and then possibly trend higher during the latter part of the year.

"Our experience is that it's remaining flat or trending toward going down a little bit," said Mark Miller, co-owner of Miller, Miller & McLachlan Construction Inc. of Northampton. "I don't feel that the new taxes going through and potential changes are giving a lot of confidence to businesses."

However, for others, the non-residential construction industry is showing signs of progress.

"We've had so much activity, really towards the end of last year," said James Gentile, president and co-owner of North Star Construction Management Inc. of Allentown. "The opportunities seem to keep coming just in the last few months. People seem more positive going forward."

Gentile said this positive growth should continue into 2013 as people become more interested in getting projects started now. North Star currently has about 10 projects going on in or near the Lehigh Valley.

Brian Pedersen

Brian Pedersen

Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 108. Follow him on Twitter @BrianLehigh and read his blog, “Can You Dig It,” at http://www.lvb.com/section/can-you-dig-it.

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