ABC Construction Backlog and Contractor Confidence Trend Lower in October

On Tuesday, Associated Builders and Contractors (ABC) reported that its Construction Backlog Indicator (CBI) fell 0.1 months to 8.4 months in October. Year-over-year, backlog was unchanged. The member survey was conducted between October 20 and November 4.

ABC noted that backlog was flat or increased on a monthly basis in each of the three industries included in the survey, while backlog for contractors without a primary industry focus—generally the smallest contractors responding to the survey—fell sharply in October to 5.8 months.

ABC’s Construction Confidence Index showed that the sales component was unchanged in October, while profit margins and staffing levels declined. All three components remained above the 50 threshold, indicating expectations for growth over the next six months.

Commenting on the report, ABC Chief Economist Anirban Basu said:

“Nearly 65% of contractors indicated that they think the US construction industry is contracting. This dismal assessment accompanied the lowest backlog reading since May, and 23% of contractors expect their sales to decline over the next six months, the highest share in over a year. These findings are consistent with an industry that is sustained by still-elevated manufacturing construction and a surging data center sector. Approximately 1 in 7 contractors are under contract to work on data centers, and those contractors have significantly higher backlog (10.9 months) than those that are not (8.0 months).”