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.”
Related Stories
Giants 400 | Sep 12, 2023
Top 80 Retail Sector Contractors and Construction Management Firms for 2023
Whiting-Turner, ARCO Construction, Swinerton, and PCL top BD+C's ranking of the nation's largest retail building contractors and construction management (CM) firms for 2023, as reported in the 2023 Giants 400 Report. Note: This ranking factors revenue for all retail buildings work, including big box stores, cineplexes, entertainment centers, malls, restaurants, strip centers, and theme parks.
Contractors | Sep 12, 2023
The average U.S. contractor has 9.2 months worth of construction work in the pipeline, as of August 2023
Associated Builders and Contractors' Construction Backlog Indicator declined to 9.2 months in August, down 0.1 month, according to an ABC member survey conducted from Aug. 21 to Sept. 6. The reading is 0.5 months above the August 2022 level.
Resiliency | Sep 11, 2023
FEMA names first communities for targeted assistance on hazards resilience
FEMA recently unveiled the initial designation of 483 census tracts that will be eligible for increased federal support to boost resilience to natural hazards and extreme weather. The action was the result of bipartisan legislation, the Community Disaster Resilience Zones Act of 2022. The law aims to help localities most at risk from the impacts of climate change to build resilience to natural hazards.
Metals | Sep 11, 2023
Best practices guide for air leakage testing for metal building systems released
The Metal Building Manufacturers Association (MBMA) released a new guidebook, Metal Building Systems - Best Practices to Comply with Whole-Building Air Leakage Testing Requirements.
Contractors | Sep 11, 2023
Construction industry skills shortage is contributing to project delays
Relatively few candidates looking for work in the construction industry have the necessary skills to do the job well, according to a survey of construction industry managers by the Associated General Contractors of America (AGC) and Autodesk.
MFPRO+ Research | Sep 11, 2023
Conversions of multifamily dwellings to ‘mansions’ leading to dwindling affordable stock
Small multifamily homes have historically provided inexpensive housing for renters and buyers, but developers have converted many of them in recent decades into larger, single-family units. This has worsened the affordable housing crisis, say researchers.
Engineers | Sep 8, 2023
Secrets of a structural engineer
Walter P Moore's Scott Martin, PE, LEED AP, DBIA, offers tips and takeaways for young—and veteran—structural engineers in the AEC industry.
Giants 400 | Sep 5, 2023
Top 80 Construction Management Firms for 2023
Alfa Tech, CBRE Group, Skyline Construction, Hill International, and JLL top the rankings of the nation's largest construction management (as agent) and program/project management firms for nonresidential buildings and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Sep 5, 2023
Top 150 Contractors for 2023
Turner Construction, STO Building Group, DPR Construction, Whiting-Turner Contracting Co., and Clark Group head the ranking of the nation's largest general contractors, CM at risk firms, and design-builders for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.
K-12 Schools | Sep 5, 2023
CHPS launches program to develop best practices for K-12 school modernizations
The non-profit Collaborative for High Performance Schools (CHPS) recently launched an effort to develop industry-backed best practices for school modernization projects. The Minor Renovations Program aims to fill a void of guiding criteria for school districts to use to ensure improvements meet a high-performance threshold.
