ABC: Construction Backlog Up Slightly in June

According to an Associated Builders and Contractors (ABC) member survey performed between June 20 and July 3, the Construction Backlog Indicator climbed to 8.4 months in June.

The reading falls 0.5 months from June 2023.

The Middle States and Northeast have accounted for the entire decrease in backlog recorded during the last calendar year.

The backlog in the South and West regions remained stable from June 2023 and June 2024.

ABC’s Construction Confidence Index scores for sales and personnel numbers dipped marginally in June, while profit margins rose.

All three indices remain over 50, indicating that growth is expected in the following six months.

“Backlog continues to hold up remarkably well despite high interest rates, inflation and emerging weakness in the broader economy,” Anirban Basu, Chief Economist of ABC said.

“While contractor confidence regarding the outlook for sales and staffing levels fell modestly in June, all three Construction Confidence Index components are higher than they were one year ago.

“The combination of slowing inflation and softening growth suggests that the Federal Reserve may begin to lower interest rates as soon as September,” Basu continued.

“That will buoy backlog as some of the softer construction segments, like office and commercial, benefit from lower borrowing costs and looser lending standards.”