Nonresidential Construction Backlog and Contractor Confidence Decline in August

On Tuesday, the Associated Builders and Contractors (ABC), a national construction industry trade association representing more than 23,000 members, released its Construction Backlog Indicator (CBI) for August. The CBI survey was conducted between August 20th and September 5th.

The CBI fell to 8.2 months in August. Year-over-year, the CBI is down 1.0 months.

Only the infrastructure category experienced a monthly increase in backlog among the three major segments, reflecting strength in public construction spending. Nonetheless, over the past year, backlog has declined in all three segments.

ABC also released its latest Construction Confidence Index (CCI). The CCI includes readings for sales, profit margins, and staffing levels, and all three fell in August. The readings for sales and staffing levels remain above the threshold of 50, indicating expectations for growth over the next six months, while the reading for profit margin expectations fell below that threshold.

In remarks accompanying the report, ABC Chief Economist Anirban Basu said:

“As predicted, confidence among contractors is slipping. While ABC contractor members are still anticipating expanding sales and employment, profits margins are increasingly under pressure as project owners face high borrowing and construction delivery costs in the context of a slowing economy. Many projects have been postponed, resulting in recent backlog declines, most notably in the South.”