Associated Builders and Contractors reported that its Construction Backlog Indicator increased to 8.4 months in April, according to an ABC member survey conducted April 22 to May 6. The reading is down 0.5 months from April 2023, but expanded 0.2 months from the prior month.
Backlog declined on a monthly basis for the largest and smallest contractors by revenue and grew for those with $30-$50 million and $50-$100 million in annual revenues. On an annual basis, only contractors with $30-$50 million in annual revenues have experienced an increase in backlog.
ABC’s Construction Confidence Index readings for sales and profit margins fell slightly in April, while the reading for staffing levels improved. All three readings remain above the threshold of 50, indicating expectations for growth over the next six months.
“The Federal Reserve began ratcheting up interest rates more than two years ago but one would not know it based on construction confidence and backlog,” said ABC Chief Economist Anirban Basu. “ABC measurements reflect ongoing momentum in the nation’s nonresidential construction sector. While there are occasional hints of softness in certain segments and over certain periods, the average contractor continues to report solid backlog and a belief that sales, employment and profit margins will expand over the next six months.
“Time will tell whether this optimism is justified,” said Basu. “Coming into the year, many expected that interest rates would fall markedly in 2024. Given stubbornly elevated inflation, that will not occur. Project financing costs are poised to remain higher for longer. Project cancellations and postponements have been on the rise. Moreover, a new set of supply chain issues has emerged, driving up materials costs and prospectively weakening industry margins. Workers also are becoming more expensive, in part because the construction wage premium has shrunk over the past several years due to rapidly rising compensation levels in competing segments like logistics and retail. The implication is that construction compensation levels will need to rise for the industry to be able to staff up more fully."
Related Stories
| Jul 9, 2014
Dragon-inspired hotel conveys Vietnamese hospitality [2014 Building Team Awards]
An international Building Team unites to create Vietnam’s first JW Marriott luxury property.
| Jul 9, 2014
The one misstep that could be slowing your company’s growth
Change. It’s inevitable. And success for any professional may very well depend on how well we adapt to it. SPONSORED CONTENT
| Jul 8, 2014
Frank Lloyd Wright's posthumous gas station opens in Buffalo
Eighty-seven years after Frank Lloyd Wright designed an ornamental gas station for the city of Buffalo, the structure has been built and opened to the public—inside an auto museum.
| Jul 7, 2014
Team unity pays off for a new hospital in Maine [2014 Building Team Awards]
Extensive use of local contractors, vendors, and laborers brings a Maine hospital project in months ahead of schedule.
| Jul 7, 2014
A climate-controlled city is Dubai's newest colossal project
To add to Dubai's already impressive portfolio of world's tallest tower and world's largest natural flower garden, Dubai Holding has plans to build the world's largest climate-controlled city.
| Jul 7, 2014
How to keep an employee from jumping ship
The secret to keeping your best employees productive and happy isn’t throwing money at them, as studies have continuously shown that money isn’t the top factor in employee happiness. Here are four strategies from leadership coach Kristi Hedges. SPONSORED CONTENT
| Jul 3, 2014
Gehry edits Canadian skyscraper plan to be 'more Toronto'
After being criticized for the original tower complex, architect Frank Gehry unveils a new design that is more subtle, and "more Toronto."
| Jul 2, 2014
First Look: Qatar World Cup stadium design references nomadic heritage
Organizers of the Qatar 2022 World Cup, the Supreme Committee for Delivery and Legacy, recently unveiled designs for the second stadium.
| Jul 2, 2014
SHoP designs what would be Brooklyn's tallest building
JDS Development partners with SHoP to construct a 70-story building at 775-feet tall, unprecedented for downtown Brooklyn.
| Jul 2, 2014
Grimshaw's 'kit of parts' design scheme selected for Qatar sports facilities program
The series of projects, called the Al Farjan Recreational Sports Facilities, have been designed in such a way that the same basic design can be adapted to the specific requirements of each site.