Associated Builders and Contractors’ Backlog Indicator Grew to 9.2 Months in February

Associated Builders and Contractors (ABC), a national construction industry trade association representing more than 22,000 members across the US, is reporting that its Construction Backlog Indicator grew to 9.2 months in February. That reading is 1.2 months higher than in February 2022.

According to ABC, the backlog rebounded in February and for the past four months has hovered around highs not seen since the start of the pandemic. The Southern region continues to post the highest backlog of any region; and, as of February, it has had at least 11 months of backlog in four of the previous five months.

Adding additional background and his analysis to the report, ABC’s Chief Economist Dr. Anirban Basu said:

“Despite a gloomy economic forecast and extraordinarily elevated borrowing costs, contractor backlog and confidence continue to rise. This mirrors the broader economy, which has thus far proved resilient in the face of rising interest rates. While economic strength, particularly regarding labor demand, is surprising, interest rate increases typically take 12 to 18 months to affect the broader economy, and the first interest rate increase occurred in March 2022.

While backlog remains at a historically elevated level, borrowing costs will continue to rise during the next several months, and contractors continue to struggle in the face of skilled labor shortages. If economic momentum fades this year, as a majority of forecasters continue to predict, then backlog and confidence may decline, especially for contractors working predominantly on privately financed projects.”