Nonresidential Construction Backlog Declines in February; Contractor Optimism Remains High

Associated Builders and Contractors (ABC), a national construction industry trade association representing more than 23,000 members, recently reported the results of its Construction Backlog Indicator for February. According to an ABC member survey conducted between February 20 through March 5, the backlog indicator declined to 8.3 months in February. Year-over-year, the measure was up 0.2 months.

Backlog fell on a monthly basis for contractors with less than $100 million in annual revenues while increasing sharply for contractors with greater than $100 million in annual revenue. Those largest contractors have also accounted for the majority of the increase in backlog observed over the past year.

ABC’s Construction Confidence Index reading for staffing improved, while the reading for profit margins declined. The reading for sales was unchanged after rounding. All three components remain above the threshold of 50, indicating expectations for growth over the next six months.

Adding background and analysis to the report, ABC Chief Economist Anirban Basu said:

“While many other economic sentiment readings have deteriorated in recent months, contractors remain optimistic that business conditions will improve through the first half of 2025. Nearly 60% of contractors intend to increase their staffing levels over the next six months, the highest share in over two years. These hiring expectations suggest that the recent slowdown in industrywide employment is largely confined to the residential segment. Yes, there are some broader signs of emerging economic weakness, but the results of this ABC member survey suggests that contractors will remain busy over the next few quarters.”