ABC’s Construction Backlog Inches Up in April; Contractor Optimism Slips

Associated Builders and Contractors reported today that its Construction Backlog Indicator rose to 7.9 months in April, according to an ABC member survey conducted April 20-May 5, 0.1 months higher than in March 2021 and April 2020.

ABC’s Construction Confidence Index readings for sales and profit margins declined modestly in April, while confidence regarding staffing level expectations increased. Only 8.6% of respondents expected staffing to decrease. All three indices remain above the threshold of 50, indicating growth expectations over the next six months.

“There was little movement in contractor sentiment in April,” said Basu. “Collectively, contractors continue to indicate that industry recovery will continue into the summer and beyond. The broader economy is poised to recover rapidly into 2022 as a potent combination of accumulated savings, stimulus, vaccinations and reopening drive consumer outlays and business spending higher. Available data indicate that while many segments, including the office market, continue to exhibit weak fundamentals, the worst is now past in terms of market deterioration.

“There are risks to the outlook, including inflation, rising interest rates and viral variants that may prove more resistant to available vaccines and treatments. Labor and materials shortages may also continue to challenge the industry. Indeed, materials prices have been racing higher recently. A recovering global economy and overwhelmed supply chains may further increase commodity prices during the months ahead, potentially suppressing contractor profit margins.”

Click here for a short video from ABC’s chief economist to see what the latest survey data mean for the construction industry.

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12 to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.

Click here for historical CCI and CBI data and here for methodology. Visit abc.org/economics for the CBI and CCI reports, plus analysis of spending, employment, GDP and the Producer Price Index.
Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 69 chapters help members 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. Visit us at abc.org