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
| Jun 20, 2014
Sterling Bay pulled on board for Chicago Old Main Post Office project
Sterling Bay Cos. and Bill Davies' International Property Developers North America partner up for a $500 million restoration of Chicago's Old Main Post Office
| Jun 20, 2014
U.S. Energy Information Administration releases preliminary Commercial Buildings Energy Consumption Survey results
Federal survey project shows that commercial-building floorspace has grown 22% since 2003; energy-use data will be released in Spring 2015.
| Jun 20, 2014
Batson-Cook appoints Rygiel VP/Business Development for Tampa office
Rygiel will be responsible for cultivating and maintaining the contractor's business relationships in the state of Florida, concentrating on expanding the firm’s presence in the state’s private-development sector.
| Jun 19, 2014
First Look: 10 Design unveils new luxury apartments plan in Dubai
The Seventh Heaven complex features a stepped form that will offer stunning views of the Dubai skyline.
| Jun 19, 2014
First look: JDS Architects' roller-coaster-like design for Istanbul waterfront development
The development's wavy and groovy design promises unobstructed views of the Marmara Sea for every unit.
| Jun 19, 2014
Singapore's 'Tree House' vertical gardens break Guinness World Record
The high-rise development will have a 24,638-sf vertical garden, breaking a Guinness World Record.
| Jun 18, 2014
Design tips for Alzheimer care facilities
A new white paper from the Alzheimer’s Foundation of America and Perkins Eastman details best design practices for residential care settings for individuals living with Alzheimer’s disease.
| Jun 18, 2014
Largest Passive House structure in the U.S. to be built in Oregon
Orchards at Orenco, a 57-unit affordable housing complex in Hillsboro, Oregon, is the first of a three-phase, three-building complex.
| Jun 18, 2014
SOM's twisting tower wins design competition for Sweden's tallest skyscraper
The skyscraper, which will reach 230 meters and is named Polstjärnan, or "The Pole Star," is to be built in Gothenburg, Sweden.
| Jun 18, 2014
Study shows walkable urbanism has positive economic impact
Walkable communities have a higher GDP, greater wealth, and higher percentages of college grads, according to a new study by George Washington University.