Non-Residential Construction Backlog and Construction Confidence Index Both Increased in September

The Associated Builders and Contractors (ABC), a national construction industry trade association representing more than 23,000 members, reported on Tuesday (10-15-24) its Construction Backlog Indicator for September. According to an ABC member survey conducted between September 20 through October 4, the backlog indicator increased to 8.6 months in September. Year-over-year (Sept. 23 – Sept. 24) the reading is down 0.4 months from September 2023.

Backlog increased in every region except for the Northeast in September. On a year-over-year basis, however, only the Middle States have longer backlog than one year ago.

ABC also reported its Construction Confidence Index readings for sales, profit margins and staffing levels improved in September. The readings for all three components are above the threshold of 50, indicating expectations for growth over the next six months.

ABC’s Chief Economist, Dr. Anirban Basu said, “Contractor confidence rebounded in September. While the reading for profit margins briefly dipped below the threshold of 50 in August, indicating net expectations of contraction, contractors are back to expecting modest expansion in their margins as of September. This optimism likely reflects falling interest rates, which will eventually serve as a tailwind for the industry, and the fact that materials prices have actually declined over the past year. Despite the improved outlook in September, contractor confidence is worse and backlog shorter than one year ago, suggesting that the effects of high interest rates continue to weigh on the industry.”