Associated Builders and Contractors reported today that its Construction Backlog Indicator inched up to 8.5 months in November from 8.4 months in October, according to an ABC member survey conducted Nov. 20 to Dec. 4. The reading is down 0.7 months from November 2022.
View ABC’s Construction Backlog Indicator and Construction Confidence Index tables for November. View the full Construction Backlog Indicator and Construction Confidence Index data series.
Despite the monthly increase, backlog is currently 0.8 months lower than at July’s cyclical peak. The sharpest declines over that span occurred among contractors with more than $100 million in annual revenues, who collectively reported fewer than 10 months of backlog in November for the first time since the second quarter of 2018.
ABC’s Construction Confidence Index readings for sales and staffing levels increased in November, while the reading for profit margins fell. All three readings remain above the threshold of 50, indicating expectations for growth over the next six months.
“A growing number of contractors are reporting declines in backlog,” said ABC Chief Economist Anirban Basu. “The interest rate hikes implemented by the Federal Reserve appear to be making more of a mark on the economy. Not only has the cost of capital risen over the past 20+ months, but credit conditions are also tightening, rendering project financing even more challenging.
“The good news is that certain interest rates have begun to fall in anticipation of Federal Reserve rate cuts next year, perhaps as early as the first quarter,” said Basu. “Still, 2024 is poised to be weaker from a construction demand perspective for many firms, especially those that depend heavily on private developers. Those operating in public construction and/or industrial segments should meet with less resistance on average.”
![The average U.S. contractor has 8.5 months worth of construction work in the pipeline, as of November 2023](/sites/default/files/inline-images/The%20average%20U.S.%20contractor%20has%208.5%20months%20worth%20of%20construction%20work%20in%20the%20pipeline%2C%20as%20of%20November%202023%201.jpg)
![The average U.S. contractor has 8.5 months worth of construction work in the pipeline, as of November 2023](/sites/default/files/inline-images/The%20average%20U.S.%20contractor%20has%208.5%20months%20worth%20of%20construction%20work%20in%20the%20pipeline%2C%20as%20of%20November%202023%202.jpg)
Â
Â
Related Stories
Contractors | Mar 24, 2016
ABC: Construction Backlog expands at the close of 2015
Uptick suggests high demand for construction workers will continue. Â
Market Data | Mar 1, 2016
ABC: Nonresidential spending regains momentum in January
Nonresidential construction spending expanded 2.5% on a monthly basis and 12.3% on a yearly basis, totaling $701.9 billion. Spending increased in January in 10 of 16 nonresidential construction sectors. Â
Market Data | Mar 1, 2016
Leopardo releases 2016 Construction Economics Report
This year’s report shows that spending in 2015 reached the highest level since the Great Recession. Total spending on U.S. construction grew 10.5% to $1.1 trillion, the largest year-over-year gain since 2007.Â
Market Data | Feb 26, 2016
JLL upbeat about construction through 2016
Its latest report cautions about ongoing cost increases related to finding skilled laborers.
Contractors | Feb 25, 2016
Huntsville’s Botanical Garden starts work on new Guest Welcome Center
The 30,000-sf facility will feature three rental spaces of varying sizes.
Architects | Feb 24, 2016
Is the booming freelance economy a threat to AEC firms?
By shifting the work (and revenue) to freelancers, “platform capitalism” startups have taken considerable market share from traditional businesses.
Religious Facilities | Feb 22, 2016
For the first time in Bulgaria, a temple’s construction raises a metal dome
The church is 2½ times larger than the basilica in Ukraine it references.
Market Data | Feb 10, 2016
Nonresidential building starts and spending should see solid gains in 2016: Gilbane report
But finding skilled workers continues to be a problem and could inflate a project's costs.
Contractors | Feb 2, 2016
ABC: Nonresidential spending falls again in December
For a second consecutive month, 12 of 16 nonresidential subsectors experienced spending decreases on a monthly basis.
Contractors | Feb 1, 2016
ABC: Tepid GDP growth a sign construction spending may sputter
Though the economy did not have a strong ending to 2015, the data does not suggest that nonresidential construction spending is set to decline.