ABC’s Construction Backlog Indicator is the only economic indicator that reflects the amount of work that will be performed by commercial and industrial construction contractors in the months ahead. The Construction Confidence Index is a diffusion index that signals construction contractors’ expectations for sales, profit margins and staffing levels. View the methodology for both indicators. 

 

WASHINGTON, Oct. 11—Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 5. The reading is 1.4 months higher than in September 2021.

Backlog reached its highest level since May 2022 and is once again above the level observed at the start of the pandemic (8.9 months in February 2020). Backlog in heavy industrial increased sizably in September, spurred by a 21.5% year-over-year increase in manufacturing-related construction spending.

ABC’s Construction Confidence Index readings for profit margins and staffing levels increased in September, while the reading for sales moved slightly lower. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.

“The construction confidence and backlog metrics appear strong despite the U.S. economy facing headwinds like inflation, financial market volatility and rapidly rising borrowing costs,” said ABC Chief Economist Anirban Basu. “Contractors remain decidedly upbeat, with backlog expanding and expectations for rising sales, employment and profit margins over the next six months.

“One would think the recent surge in interest rates would be enough to dampen contractor confidence,” said Basu. “Instead, project owners continue to move forward with a significant number of projects. Faced with high demand for their services, contractors continue to show pricing power, helping to offset rising compensation and other construction delivery costs.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.

ABC construction economic releases are published according to this schedule in 2023

For media inquiries, please contact Erika Walter, ABC director of media relations, at [email protected].

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