ABC’s Construction Backlog Indicator plummets in July

Associated Builders and Contractors (ABC)’s Construction Backlog Indicator fell to 8.0 months in July, according to an ABC member survey conducted July 20 to Aug. 4. The reading is down 0.8 months from both a month and year ago. 

The South remains the only region with larger backlog than one year ago. Every industry, region, and company size experienced a decline in backlog in July.

ABC’s Construction Confidence Index readings for sales and staffing levels also fell in July, while the reading for profit margins increased. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Backlog fell sharply in July and is down to the lowest level since January,” said ABC Chief Economist Anirban Basu. “The data center boom masks the depth of this weakness, as there is a lack of momentum in any other segment. The 88% of ABC contractors that are not under contract to work on a data center had an average 7.5 months of backlog. That compares poorly to the 12% that are under contract to work on data centers, which have 11.4 months of backlog.

“This dynamic has been particularly difficult for small and midsize contractors. Backlog in the $30 million to $50 million annual revenue category, for instance, fell to the lowest level since March 2020.”

View ABC’s Construction Backlog Indicator and Construction Confidence Index for July. Click here to view the full Construction Backlog Indicator and Construction Confidence Index data series.

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.