Associated Builders and Contractors (ABC) reports that its Construction Backlog Indicator increased to 8.9 months in April from 8.7 in March, according to an ABC member survey conducted from April 20 to May 3. The reading is 0.1 months higher than in April 2022.
View ABC’sConstruction Backlog Indicator andConstruction Confidence Index tables for April. View the historic Construction Backlog Indicator and Construction Confidence Indexdata series.
After declining to a seven-month low in March, the backlog rebounded in April due to strength in the infrastructure category. Regionally, backlog increased in the Northeast and West but fell in the South and Middle US states.
ABC’s Construction Confidence Index reading for sales and staffing moved higher in April, while the readings for profit margins inched lower. All three readings remain above the threshold of 50, indicating growth expectations over the next six months.
“Based on ABC member sentiment, one would not be able to discern that interest rates are high, the nation’s banking sector is in tumult, politicians are arguing over the nation’s debt limit, and recession fears remain pervasive,” said ABC chief economist Anirban Basu. “Despite many headwinds and an active news cycle, contractors continue to express confidence in the near term.
“Still, there is some evidence of a shift,” said Basu. “With credit conditions tightening, expectations are that private construction is poised for weaker times ahead. Nonetheless, the backlog expanded in April as infrastructure contractors began to take on more public works projects. Moreover, despite rapidly rising compensation costs, more ABC contractors expect profit margins to expand as opposed to recede over the next six months, evidence of sufficiently strong demand for construction services to support pricing power.”
Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to reflect the survey period better. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.
