New data from the Associated Builders and Contractors has provided insights into the American construction sector’s backlog and material prices.
The Associated Builders and Contractors (ABC) revealed its Construction Backlog Indicator rose to 8.7 months in April which it said is a 20-month high. The data was pulled from an ABC member survey conducted between April 22 and May 6.
The key takeouts from the data show that backlog has increased significantly for contractors with annual revenues of more than $100 million, while backlogs are down on an annual basis for contractors with annual revenues between $30 million and $100 million.
ABC’s Construction Confidence Index reading for profit margins improved in April, while the readings for sales and staffing levels fell, though the outlook for sales is higher than a year ago.
“Nearly 22 per cent of contractors had a project delayed or cancelled in April due to tariffs, up from 18 per cent in March, while 87 per cent have been notified of tariff-related materials price increases,” ABC chief economist Anirban Basu said.
“Contractors remain busy despite these headwinds; backlog rose in April and is now at the highest level since September 2023. While ABC members remain upbeat about the near-term outlook, the share of respondents that expect their sales to decline over the next six months rose to 19 per cent in April, up 6 percentage points since the start of the year.”
Elsewhere, ABC reported construction input prices decreased 0.1 per cent in April while nonresidential construction input prices increased 0.2 per cent for the month.
The ABC analysed the latest data from the US Bureau of Labor Statistics’ Producer Price Index. The results show overall construction input prices are 0.1 per cent higher than a year ago while nonresidential construction input prices are 0.2 per cent higher compared to the same period.
“Construction input prices declined in April, but that was largely due to falling energy prices,” Basu said. “Materials directly affected by tariffs saw sharp price increases for the month. Steel mill product prices, for instance, rose 5.9 per cent, while copper wire and cable prices increased 5.0 per cent.
“While recent developments have reduced tariff-related uncertainty, the 25 per cent tax on steel and aluminium imports remains in place, and a sudden resumption in imports from China could cause an increase in shipping prices. Despite the upward pressure that these factors will put on input prices, just one in four contractors expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index.”
