ABC’s Construction Backlog Indicator Jumps in September; Contractor Confidence Steady
Oct. 11, 2022 - Associated Builders and Contractors reports that its Construction Backlog Indicator grew 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.
The backlog reached its highest level since May 2022 and is once again above the level seen 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.”
Basu added, “One would think the recent surge in interest rates would be enough to dampen contractor confidence. 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.”
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings, GDP and the Producer Price Index.