Construction industry confidence increased in November, while the nation’s construction backlog remained virtually unchanged at 8.4 months, according to an Associated Builders and Contractors member survey.
The backlog reading was down 0.1 months to 8.4 months across the country compared with November 2023. Infrastructure was the only category with a higher backlog in November on a year-over-year basis, according to ABC’s Construction Backlog Indicator. The commercial and institutional backlog remained at 8.5 months and the heavy industrial backlog increased from 8.1 months to 8.7 months from October’s backlog figures.
Construction backlogs are longest in the South, averaging 9.4 months, and shortest in the middle states at 7.7 months. Construction backlog in the Northeast stands at 8 months and 8.6 months in the West.
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Confidence is trending up in the construction industry, ABC’s data shows. Readings in its Construction Confidence Index for sales, profit margins and staffing levels improved in November and remained above the threshold of 50, which indicates expectations for growth over the next six months.
Most members (51.6%) expect small increases in sales and 23% expect no change in sales. About 10% predicted a big increase in sales and 16% expected a decrease in sales. About 60% of members expect profit margins to increase, while 44% expect no change and 17% expect a decrease in profit margins. Half of members said staffing levels will have a small increase, while 35% expect no change in staffing.
“Contractor confidence surged in November even though backlog was unchanged for the month," said ABC chief economist Anirban Basu. “This sudden improvement in confidence reflects increased policy certainty in the wake of November’s presidential election, and contractors are optimistic about the prospect of falling borrowing costs over the next several quarters. Though backlog contracted in the commercial and institutional and heavy industry categories last month, contractors expect increased activity in privately financed segments during the next six months.”
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
