Associated Builders and Contractors’ Construction Backlog Indicator rebounded to 8.5 months in August, up 0.5 months from July and unchanged from a year ago, according to an ABC member survey conducted Aug. 20 through Sept. 4.
Backlog year-over-year gains were concentrated among contractors with less than $30 million in annual revenue.
ABC’s Construction Confidence Index also showed improved expectations for sales and profit margins in August, while confidence in staffing levels declined. All three measures remained above the threshold of 50, indicating contractors continue to expect growth over the next six months.
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.
“Backlog rebounded from July’s cyclical low but remains below the prevailing level from the last several months,” said ABC Chief Economist Anirban Basu. “Data centers continue to keep contractors busy even as activity softens in other segments. Although the backlog gap between contractors with and without data center work narrowed in August (9.9 vs. 8.3 months, respectively), that appears to reflect more contractors securing work in the data center segment rather than a broader structural trend. Roughly 1 in 6 ABC members is currently under contract to work on a data center, the highest proportion on record.
“The share of contractors that intend to cut their staffing levels over the next six months rose to 12.3% in August, the most in any month since December,” said Basu. “At the same time, there was a sharp increase in the number of contractors who, unprompted, mentioned labor shortages in the survey. With construction job openings at a near two-year high, it appears that labor scarcity is reemerging as a major headwind for the industry.”
ABC’s Construction Backlog Indicator and Construction Confidence Index for August. View the full Construction Backlog Indicator and Construction Confidence Index data series.
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. View the methodology for both indicators. |
