Associated Builders and Contractors (ABC) said its Construction Backlog Indicator declined to 8.1 months in February, according to a member survey conducted Feb. 20 to March 5. The reading is down 1.1 months from February 2023.
The backlog fell for every size contractor except those with under $30 million in annual revenues in February. Over the past year, however, the largest contractors—those with greater than $50 million in revenues—have experienced the greatest decline in backlog.
ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels also decreased in February. However, all three readings remain above the threshold of 50, indicating expectations for growth over the next six months.
“Backlog is declining and confidence began to fade modestly in February,” stated ABC Chief Economist Anirban Basu. “While it is far too early to predict an industrywide downturn given that confidence readings continue to signal growth along sales, employment and profit margin dimensions, it appears a rising tide of project cancellations and postponements has begun to make its mark.
“With excess inflation remaining stubbornly durable, interest rates are poised to remain higher for longer,” Basu added. “With so much federal money still entering the economy, there will continue to be support for growth in certain construction segments, including public works and manufacturing-related megaprojects, but industry weakness is more apparent in segments that rely more purely on private financing.”
View ABC’s Construction Backlog Indicator at https://www.abc.org/Portals/1/CEU/CBI_Table_3.7.24.jpg?ver=TNSUBcEyutptaIGcinHHHQ%3d%3d×tamp=1709823467651 and Construction Confidence Index at https://www.abc.org/Portals/1/CEU/CCI_Table_3.7.24.jpg?ver=TNSUBcEyutptaIGcinHHHQ%3d%3d×tamp=1709823451633.
