Construction Backlog Holds Steady in August

The Associated Builders and Contractors (ABC) recently reported that, according to an ABC member survey conducted from August 21st to September 6th, its Construction Backlog Indicator declined to 9.2 months in August, down 0.1 month. Year-over-year, the backlog is 0.5 month above the previous year’s level.

Backlog decreased on a monthly basis for all categories of company size except for those with more than $100 million (USD) in annual revenues, while only the smallest two revenue categories have higher backlog than in August 2022.

ABC’s Construction Confidence Index reading for sales, profit margins, and staffing levels moved higher in August. All three readings remain above the threshold of 50, indicating expected growth over the next six months.

Adding additional background and his analysis, ABC Chief Economist Anirban Basu said:

“There’s no sign of a construction recession in the near term. If anything, contractors are more upbeat, as policy and technology shifts along with economic transformation, are creating substantial demand for improvements and growth in America’s built environment.

While a plurality of contractors expects only small improvements in sales, profit margins and staffing over the next six months, even incremental improvement is remarkable in the context of tightening credit, higher project financing costs and lingering fears of recession. Backlog continues to be at the upper end of historic levels, with the infrastructure category registering substantial gains in backlog in August. That suggests that a growing number of public works projects is poised to break ground.”