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Oct. 16 — The Associated Builders and Contractors association reports that its Construction Backlog Indicator declined to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 4.
The reading is equivalent to one year ago.
View ABC’s Construction Backlog Indicator and Construction Confidence Index tables for September. View the full Construction Backlog Indicator and Construction Confidence Index data series.
Though it declined last month, the South continues to have the longest backlog.
That has been the case since October 2021.
Over the past year, only the West has seen a growing backlog.
ABC’s Construction Confidence Index reading for sales and staffing edged higher in September.
The profit margins reading fell slightly.
All three readings remain above the threshold of 50, indicating that growth is expected over the next six months.
“Construction continues to defy the downward gravitational pull of tightening credit conditions,” said ABC Chief Economist Anirban Basu. “Despite high and rising project financing costs, ABC contractor members continue to report lofty backlog, rising employment, expanding sales and stable profit margins.”
Basu added that industry headwinds are getting stronger. “Interest rates are still edging higher. Political dysfunction in Washington persists. Rising worker compensation costs and lingering supply chain issues are still frustrating industry performance and profitability,” he said.
Basu believes the U.S. economy is ready to slow down. “If the past is any indication, that will eventually catch up to construction in the form of dissipating demand,” he said. “But economists have talked about recession for more than a year, and the industry still shows substantial forward momentum. It remains to be seen whether that momentum can survive the latest set of challenges.”
