Associated Builders and Contractors Reported its Construction Backlog Indicator Increased in June

The Associated Builders and Contractors (ABC), a national construction industry trade association representing more than 23,000 members reported on Tuesday (7-9-24) that its Construction Backlog Indicator increased to 8.4 months in June. This according to an ABC member survey conducted between June 20th and July 3rd. Year-over-year (Jun. 23 – Jun. 24) the reading is down 0.5 months.

According to ABC the entire decline in backlog observed over the past calendar year is attributable to the Middle States and Northeast. Backlog in the South and West regions was unchanged between June 2023 and June 2024.

ABC’s Construction Confidence Index (CCI) for June was also included in the press release. The CCI readings for sales and staffing levels fell slightly in June, while the reading for profit margins improved. All three readings remain above the threshold of 50, indicating expectations for growth over the next six months.

Adding additional background to the ABC reports, ABC’s Chief Economist Dr. Anirban Basu – Ph.D. – Health economics said, “Backlog continues to hold up remarkably well despite high interest rates, inflation, and emerging weakness in the broader economy. 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.”

Dr. Basu added that “The combination of slowing inflation and softening growth suggests that the Federal Reserve may begin to lower interest rates as soon as September. That will buoy backlog as some of the softer construction segments, like office and commercial, benefit from lower borrowing costs and looser lending standards.”