Associated Builders and Contractors (ABC)’s Construction Backlog Indicator rebounded to 8.5 months in August, according to an ABC member survey conducted Aug. 20 to Sept. 4. That reading is up 0.5 months from July and unchanged on a year-over-year basis.
Only the largest contractors experienced a decline in backlog in August. Year over year, the backlog gains are concentrated among the smallest contractors (those with less than $30 million in annual revenues).
“Backlog rebounded from July’s cyclical low but remains below the prevailing level from the last several months,” said ABC Chief Economist Anirban Basu. “Data centers continue to keep contractors busy even as activity softens in other segments. Although the backlog gap between contractors with and without data center work narrowed in August (9.9 vs. 8.3 months, respectively), that appears to reflect more contractors securing work in the data center segment, rather than a broader structural trend. Roughly one in six ABC members are currently under contract to work on a data center—the highest proportion on record.”
ABC’s Construction Confidence Index readings for sales and profit margins also increased in August, while the reading for staffing levels fell. Still, the readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
“The share of contractors that intend to cut their staffing levels over the next six months rose to 12.3% in August, the most in any month since December,” Basu said. “At the same time, there was a sharp increase in the number of contractors who, unprompted, mentioned labor shortages in the survey. With construction job openings at a near two-year high, it appears that labor scarcity is re-emerging as a major headwind for the industry.”
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.
About Associated Builders and Contractors
Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 with 67 chapters and 24,000 members. Founded on the merit-shop philosophy, ABC helps members offer a robust employee value proposition, develop people, win work, and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work.
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