August reading down as infrastructure and heavy industrial work offset weakness in commercial and institutional sectors
Associated Builders and Contractors said Sept. 16 that its Construction Backlog Indicator fell to 8.55 months in August from 8.8 months in July, based on a member survey conducted Aug. 20-Sept. 3. The measure remains above the 8.2-month reading from August 2024.
"The dip in backlog observed in August is not surprising," said ABC Chief Economist Anirban Basu, citing ongoing declines in nonresidential construction spending and weakness in commercial and institutional work. He said heavy industry and infrastructure remain resilient, while private-sector projects are struggling with cost pressures, policy uncertainty and labor shortages.
Company size continued to drive differences: contractors with less than $30 million in annual revenue reported 7.15 months of backlog, compared with 13.5 months at firms above $100 million. ABC said backlog at the largest contractors has risen for three consecutive months and is now at its highest level in more than two years.
Regionally, the South continued to lead all regions with 10.0 months of work under contract, followed by the Midwest at 8.34 months, the Northeast at 7.97 months and the West at 6.63 months.
By market segment, commercial and institutional projects averaged 8.32 months of backlog in August, while heavy industrial stood at 11.0 months and infrastructure at 11.16 months.
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In the face of economic uncertainty, contractor sentiment showed little change. ABC's Construction Confidence Index readings showed sales expectations at 60.4 in August, staffing at 59.9 and profit margins at 51.9, each above the threshold of 50 that signals anticipated growth.