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)
Related Stories
| Aug 10, 2022
Gresham Smith Founder, Batey M. Gresham Jr., passes at Age 88
It is with deep sadness that Gresham Smith announces the passing of Batey M. Gresham Jr., AIA—one of the firm’s founders.
| Aug 9, 2022
Work-from-home trend could result in $500 billion of lost value in office real estate
Researchers find major changes in lease revenues, office occupancy, lease renewal rates.
| Aug 9, 2022
5 Lean principles of design-build
Simply put, lean is the practice of creating more value with fewer resources.
| Aug 9, 2022
Designing healthy learning environments
Studies confirm healthy environments can improve learning outcomes and student success.
Legislation | Aug 8, 2022
Inflation Reduction Act includes over $5 billion for low carbon procurement
The Inflation Reduction Act of 2022, recently passed by the U.S. Senate, sets aside over $5 billion for low carbon procurement in the built environment.
| Aug 8, 2022
Mass timber and net zero design for higher education and lab buildings
When sourced from sustainably managed forests, the use of wood as a replacement for concrete and steel on larger scale construction projects has myriad economic and environmental benefits that have been thoroughly outlined in everything from academic journals to the pages of Newsweek.
AEC Tech | Aug 8, 2022
The technology balancing act
As our world reopens from COVID isolation, we are entering back into undefined territory – a form of hybrid existence.
Legislation | Aug 5, 2022
D.C. City Council moves to require net-zero construction by 2026
The Washington, D.C. City Council unanimously passed legislation that would require all new buildings and substantial renovations in D.C. to be net-zero construction by 2026.
Cultural Facilities | Aug 5, 2022
A time and a place: Telling American stories through architecture
As the United States enters the year 2026, it will commence celebrating a cycle of Sestercentennials, or 250th anniversaries, of historic and cultural events across the land.
Sponsored | | Aug 4, 2022
Brighter vistas: Next-gen tools drive sustainability toward net zero line
New technologies, innovations, and tools are opening doors for building teams interested in better and more socially responsible design.