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
| May 13, 2014
Libeskind wins competition to design Canadian National Holocaust Monument
A design team featuring Daniel Libeskind and Gail Dexter-Lord has won a competition with its design for the Canadian National Holocaust Monument in Toronto. The monument is set to open in the autumn of 2015.
| May 11, 2014
8 starter questions to answer when thinking about building
So, are you ready to start building? Completing these eight questions will help you answer that confidently. SPONSORED CONTENT
| May 8, 2014
Don’t bother planning for the future - it doesn’t care about you
Though strategic planning has helped many businesses move forward, its time has passed. So says Economist and Author Bill Conerly. SPONSORED CONTENT
| May 8, 2014
Infographic: 4 most common causes of construction site fatalities
In honor of Safety Week, Skanska put together this nifty infographic on how to prevent deadly harm in construction.
| May 6, 2014
'Beyond' is artist's cinematic take on 2.5 years of development in the UAE
Seven-minute video offers a time-lapse trip through the built environments of Abu Dhabi and Dubai.
| May 6, 2014
'Ugliest building in New Jersey' finally getting facelift
After a decade of false starts and mishaps, the American Dream mall in the Meadowlands may finally get built.
| May 5, 2014
Toronto residential tower to feature drawer-like facade scheme
Some of the apartments in the new River City development will protrude from the building at different lengths, creating a drawer-like "push-pull" effect.
| May 2, 2014
Structure Tone pleads guilty to charge of arranging inflated subcontractor bills
Construction giant will pay a $55 million forfeiture after pleading guilty to a charge of arranging inflated subcontractor fees.
| May 2, 2014
Norwegian modular project set to be world's tallest timber-frame apartment building [slideshow]
A 14-story luxury apartment block in central Bergen, Norway, will be the world's tallest timber-framed multifamily project, at 49 meters (160 feet).