ABC: June 2023 Construction Backlog Indicator Remained Stable, Contractor Confidence Fell

According to an Associated Builders and Contractor member poll performed from June 20 to July 5, the Construction Backlog Index stayed steady at 8.9 months in June.

The reading has not changed since June 2022.

See the historical data series for the Construction Backlog Indicator and the Construction Confidence Index.

Backlog in the infrastructure sector grew for the third month in a row, reaching its highest level in over two years.

Regionally, the South continues to have the biggest backlog, while being the only region where backlog decreased in June.

In June, ABC’s Construction Confidence Index readings for sales, profit margins, and personnel levels fell.

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

“Backlog once again remained stable in June despite tight credit conditions and high interest rates,” Anirban Basu, ABC’s Chief Economist, stated.

“While those risk factors drove a decline in all three Construction Confidence Index series, contractors continue to signal an expectation that sales, profit margins and staffing will expand over the second half of 2023.

“Many aspects of the economy, including consumer spending and the labor market, held up better than expected in the second quarter,” Basu continued.

“That bodes well for economic growth over the summer, but also suggests that the Federal Reserve may raise rates higher and keep them there longer in their ongoing efforts to suppress inflation. All else equal, that will reduce construction activity in the quarters to come.”