Contractors Hot Line is part of the Catalyst Communications Network publication family.
Contractors Hot Line is part of the Catalyst Communications Network publication family.
Associated Builders and Contractors (ABC) announced that its Construction Backlog Indicator increased to 8.5 months in March. The figure, based on an ABC member survey conducted from March 20 to April 6, marks a 0.3-month rise from March 2024.
Backlog grew on a monthly basis across all nonresidential construction subsegments in March. However, over the past year, only the infrastructure category has seen a meaningful increase in backlog.
ABC’s Construction Confidence Index for staffing improved in March, while readings for sales and profit margins declined. Despite the dip, all three components remained above the threshold of 50, indicating expectations for growth over the next six months.
The report also noted a shift in sentiment following the tariffs announcement on April 2. Respondents who completed the survey after the announcement were less optimistic, with fewer than 26% expecting profit margins to increase over the next six months and more than 40% anticipating contraction.
ABC chief economist Anirban Basu said, “Backlog increased in March and contractors remained optimistic regarding the future, but this largely reflects contractor activity and sentiment prior to April 2, when the most consequential economic policy in several decades was announced.”
“Approximately 80% of ABC contractors surveyed indicate that suppliers have notified them of tariff-related materials price increases, and nearly 20% of contractors surveyed had projects paused or interrupted because of tariffs during March,” Basu added.
“These tariffs have already materially diminished the outlook for construction activity in 2025. Many businesses are poised to delay or even cancel planned capital investments given the current business environment and daily market convulsions. Conditions will likely deteriorate further if elevated tariff rates remain in place for any meaningful length of time.”
The Construction Backlog Indicator quantifies the previous month’s work under contract based on the latest financials, while the Construction Confidence Index measures contractors’ outlook for the next six months.
More details, including methodology and analysis of construction spending, employment, job openings and the Producer Price Index, are available at abc.org/economics.
