By Associated Builders and Contractors
Associated Builders and Contractors reported its Construction Backlog Indicator fell from 8.8 months in July to 8.5 months in August, according to an ABC member survey conducted Aug. 20 to Sept. 3. The reading is up 0.3 months since August 2024.
The monthly decline in backlog was entirely attributable to contractors with fewer than $30M in annual revenues. Backlog has risen in each of the past three months for ABC’s largest contractors and is now at the highest level in over two years.
ABC’s Construction Confidence Index reading for sales was unchanged in August. The reading for staffing declined, while the reading for profit margins increased. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
“The dip in backlog observed in August is not surprising given ongoing declines in nonresidential construction spending,” said ABC Chief Economist Anirban Basu. “While backlog in the heavy industry and infrastructure categories has held up well, commercial and institutional backlog has not. With private sector projects struggling under the weight of rising materials costs, policy uncertainty and reemerging labor shortages, that category may remain weak over the next few quarters.
“About one in four contractors reported having a project delayed or canceled due to tariffs,” said Basu. “While that is relatively stable from July, a similar share reported project delays or cancellations due to lack of funding and labor force issues. While contractor confidence was stable for the month, it will be interesting to see how long this optimism persists if the myriad headwinds facing the industry remain in place.” (Source)