A Backlog is Good for Business

Backlog fuels the fire

Backlog fuels the fire

Some people think a “backlog” is a negative thing.  We certainly don’t want a backlog of chores to do.  But historically speaking, a backlog is a positive thing.  It started as a term for a large log placed at the back of a fire, to be stored for later as the fire burns.  It has come to mean something held in reserve, or stored up.

As the economy improves, and banks start to lend again, people are starting to build.  More work is becoming available in the construction industry at all levels, from home remodels to infrastructure projects.  The backlog, however, is still short in many architecture and engineering firms.  “Backlog” is a word commonly used in the construction industry.  It does not mean that projects are backed up, waiting to get going.  It means that the firm is working on many projects in various stages of development simultaneously, such that it has work in the pipeline for a certain number of months or years.  Depending on its size, a firm needs a backlog of six months or more to be a healthy firm, with some projects in the design phase, some submitted for permitting, some under construction, and so on.  Projects are not slowed down by the backlog; in fact, the bigger the backlog, the more efficient the firm can be.  It is more likely that the firm will be able to focus more energy on production, increase hiring, and be more active in the local community.  While architecture and engineering firms are working to increase their backlogs, you will get excellent proposals and access to top talent.

General Contractors still have a short backlog as well.  Many excellent licensed contractors are looking for work and giving very competitive bids.  As the backlog builds, we will see bids go back up to pre-recession pricing as contractors fill their schedules with work.   Now is a good time to get bids on a proposed project.

Access to capital is important to our country’s economic recovery and will increase the backlog in construction.  Interest rates are still historically low, and banks want to lend to businesses and individuals that survived the recession with their credit intact and have good cash flow.  It is a really good time to talk to your lender and line up financing for a project. 

Planning and Building Departments at cities and counties get backlogs too.  A project will need time in the schedule to allow for planning staff to get through their process.  If it requires a variance, or a public hearing, the project needs to get scheduled on public meeting agendas.  Some communities are quoting longer lead times to get permits.  This is especially true if a jurisdiction experienced personnel layoffs during the recession.  If a project is planned to be under construction this summer, then it needs to get into the planners’ hands as soon as possible.  Getting in the queue early (February and March) is the key to avoiding delays.

The season can affect the backlog as well.  It is human nature to start thinking about doing improvements or tackling new projects as the weather starts to warm up.  Even if a project is already underway, there are distractions during the holidays, and people are out of town or unavailable for meetings or decisions, and deadlines can slip into the next year.  So, in the spring there are a number of projects coming out of winter hibernation.

At The Kastrop Group, Inc. Architects we see the backlog building in our industry.  From home remodels to apartment and office buildings, building owners and landlords can see that now is an excellent time to get moving on a project that has been on the back burner.  You can improve your building to get desirable features, add more space and attract more tenants or customers.  The numbers on building improvements will “pencil out” right now, making good financial sense in a cost-benefit analysis.  Building a backlog is good for business, and good for the economy. 

Lorianna Kastrop

The Kastrop Group, Inc. Architects

Designing for Your Reality

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