ABC: December Construction Backlog Indicator Falls, Contractor Confidence Rises

According to an ABC member survey performed between December 20 and January 6, the Construction Backlog Indicator decreased to 8.3 months in December.

The reading is reduced by 0.3 months from December 2023.

Backlog in the commercial and institutional categories has decreased by over a month over the last year and is now at its lowest level since February 2023.

In contrast, the infrastructure backlog has reached its largest level since August 2023.

ABC’s Construction Confidence Index values for sales and personnel numbers rose in December, while profit margins fell.

All three components’ ratings stay over 50, indicating that they will rise during the following six months.

“While backlog inched lower in December, contractors broadly expect construction activity to pick up in the first half of this year,” said Anirban Basu, the ABC Chief Economist.

“Contractor confidence remained extraordinarily elevated in December, with the share of contractors that expect their sales to increase over the next six months now at the highest level since early 2022. Despite that confidence, the path of interest rates will play a critical role in industry performance in 2025. If rates remain higher for longer, backlog may remain subdued, especially in the struggling commercial and institutional category.”

[Read more about this story on abc.org]