By Associated Builders and Contractors
Associated Builders and Contractors reported its Construction Backlog Indicator rose to 8.5 months in March, according to an ABC member survey conducted March 20 to April 6. The reading is up 0.3 months since March 2024.
Backlog increased on a monthly basis for all nonresidential subsegments in March. Over the past year, however, only the infrastructure category has experienced a meaningful increase in backlog.
ABC’s Construction Confidence Index reading for staffing improved, while the readings for sales and profit margins fell. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
Notably, respondents who completed the survey after the April 2 tariffs announcement were significantly less upbeat—fewer than 26% of those respondents expected their profit margins to expand over the next six months, while more than 40% expected them to contract.
“Backlog increased in March and contractors remained optimistic regarding the future, but this largely reflects contractor activity and sentiment prior to April 2, when the most consequential economic policy in several decades was announced,” said ABC Chief Economist Anirban Basu.
“Approximately 80% of ABC contractors surveyed indicate that suppliers have notified them of tariff-related materials price increases, and nearly 20% of contractors surveyed had projects paused or interrupted because of tariffs during March,” said Basu. “These tariffs have already materially diminished the outlook for construction activity in 2025. Many businesses are poised to delay or even cancel planned capital investments given the current business environment and daily market convulsions. Conditions will likely deteriorate further if elevated tariff rates remain in place for any meaningful length of time.” (Source)