ABC: July Sees Uptick in Construction Backlog Indicator, Contractors Stay Confident

According to an ABC member survey conducted from July 20 to August 4, the Associated Builders and Contractors Construction Backlog Index climbed to 9.3 months in July.

From July 2022, the reading has risen by 0.6 month.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Despite being the only region with a reduced backlog a year ago, the South continues to have the highest amount of backlog.

In July, backlog growth was primarily in the commercial and institutional sectors.

Profit margins and personnel levels rose in July, although sales dipped marginally, according to ABC’s Construction Confidence Index.

All three readings remain over the 50-point threshold, indicating that growth is expected over the next six months.

“Nonresidential construction backlog continues to expand, which is precisely what contractors had predicted six months ago,” Anirban Basu, ABC’s Chief Economist, stated.

“For many months, contractors have been signaling an expectation that demand for their services would continue to expand despite high and rising interest rates and a spate of regional bank failures.

“That said, there are some surprises in the data,” Basu continued.

“Backlog declined in both the infrastructure and heavy industry categories, possibly because the current administration is striving to reserve many large-scale projects for unionized firms. ABC members are largely nonunion, and therefore may be locked out of a meaningful proportion of significant opportunities. Diminished competition for such projects would tend to drive up construction service delivery charges, much of which are financed by American taxpayers.”