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
| Sep 17, 2013
SMPS Foundation announces new business development research book
The SMPS Foundation has released its latest research book, A/E/C BUSINESS DEVELOPMENT – The Decade Ahead.
| Sep 17, 2013
Healthcare project will merge outpatient clinic with YMCA to promote wellness and prevention
Penrose-St. Francis Health Services and the YMCA of the Pikes Peak Region announce collaboration, along with developer The Boldt Company, to create next-generation wellness facility.
| Sep 17, 2013
AIA sees uptick in architecture billings for August
AIA's Architecture Billings Index was 53.8 in August, up from 52.7 the previous month, signaling increased demand for design services nationwide. The West and Northeast regions saw the biggest ABI gains last month.
| Sep 16, 2013
Does brainstorming work?
The idea-generating process known as brainstorming has come under some intense fire recently. Critics contend that it suspends much-needed criticism and conflict while suppressing the creative ideas of introverts.
| Sep 16, 2013
Forty-three percent of energy leaders will invest more in efficiency next year (infographic)
Forty-three percent of energy leaders say their investment in energy efficiency next year is projected to be more than it was last year, according to survey results released today by Schneider Electric. Twenty-two percent said their projected investment would stay the same, and 10 percent reported their investment would be less than last year.
| Sep 16, 2013
Forty-three percent of energy leaders will invest more in efficiency next year (infographic)
Forty-three percent of energy leaders say their investment in energy efficiency next year is projected to be more than it was last year, according to survey results released today by Schneider Electric. Twenty-two percent said their projected investment would stay the same, and 10 percent reported their investment would be less than last year.
| Sep 16, 2013
Construction spending hits four-year high in July: AGC report
Total construction spending hit a four-year high in July as private residential and nonresidential activity increased while public spending declined, according to an analysis of new Census Bureau data by the Associated General Contractors of America. Association officials urged lawmakers in Washington to make infrastructure investment a top federal priority before funding runs out at the end of September.
| Sep 13, 2013
Loews Hotels & Resorts announces major cross-portfolio upgrades
Loews Hotels & Resorts is currently in the midst of a major growth and property redesign initiative, reflecting a strong national trend in hospitality renovation.
| Sep 13, 2013
Video: Arup offers tour of world's first algae-powered building
Dubbed BIQ house, the building features a bright green façade consisting of hollow glass panels filled with algae and water.
| Sep 11, 2013
Inaugural BUILDINGChicago/Greening the Heartland Expo & Conference draws attendees from 27 states
More than 500 attendees from 27 states attended the inaugural BUILDINGChicago/Greening the Heartland Conference, held September 9-11, at the Holiday Inn Chicago Mart Plaza.