Construction firms saw their project backlogs shrink sharply in July, according to new survey data from Associated Builders and Contractors. The trade group’s Construction Backlog Indicator dropped to 8 months. The figures come from an ABC member survey fielded between July 20 and August 4.
The pullback wasn’t isolated to one corner of the industry — every sector, region and company size reported thinner backlogs last month. The South was the sole exception on a year-over-year basis, still holding more backlog than it had a year earlier.
ABC’s companion measure, the Construction Confidence Index, showed a similar mixed picture: expectations around sales and staffing softened in July, though anticipated profit margins ticked up. All three components stayed above the 50-point mark that signals contractors still expect growth over the coming six months.
“Backlog fell sharply in July and is down to the lowest level since January,” said ABC Chief Economist Anirban Basu. “The data center boom masks the depth of this weakness, as there is a lack of momentum in any other segment. The 88% of ABC contractors that are not under contract to work on a data center had an average 7.5 months of backlog. That compares poorly to the 12% that are under contract to work on data centers, which have 11.4 months of backlog. This dynamic has been particularly difficult for small and mid-size contractors. Backlog in the $30-$50 million annual revenue category, for instance, fell to the lowest level since March 2020.”
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.
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.
