By Associated Builders and Contractors
The Construction Backlog Indicator, as reported by Associated Builders and Contractors, decreased to 9.2 months in August, a slight drop of 0.1 month compared to the previous month. This information was gathered from an ABC member survey conducted between August 21 and September 6, and it is 0.5 months higher than August 2022 levels. The backlog declined for most company sizes except those with annual revenues exceeding $100M, and only the smallest revenue categories showed higher backlog compared to August 2022.
On a more positive note, ABC’s Construction Confidence Index for sales, profit margins, and staffing levels increased in August, with all three readings above the threshold of 50. This suggests expectations of growth in these areas over the next six months.
According to ABC’s Chief Economist Anirban Basu, there is no indication of a construction recession in the near future. Contractors are generally optimistic due to policy changes, technological advancements, and economic transformations, which are driving demand for improvements and growth in the construction industry. Despite some concerns like tightening credit and higher project financing costs, backlog levels remain historically high, especially in the infrastructure category, indicating an increasing number of public works projects ready to begin. (Source)