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) reported recently that the Construction Backlog Indicator (CBI) remained unchanged at 8.4 months in July. However, this figure represents a decrease of 0.9 months compared to July 2023. The data was gathered from an ABC member survey conducted between July 22 and Aug.6.
The steady backlog is primarily attributed to larger contractors, those with annual revenues exceeding $100 million, who are experiencing longer backlogs compared to a year ago. Conversely, smaller contractors, those with revenues below $50 million, have seen a decline in their backlog.
Additionally, ABC’s Construction Confidence Index, which tracks projections for sales, profit margins and staffing levels, showed a decline in all three areas for July. Despite these drops, the index remains above 50, suggesting a continued expectation for growth over the next six months.
“Contractor confidence regarding profit margins now stands at the lowest level since November 2022, which comes as little surprise," said ABC Chief Economist Anirban Basu. “There are now strong indications that elevated interest rates have finally taken their toll on a number of privately financed construction segments as well as the broader economy.
“While inflation has moderated in recent months, construction materials prices remain almost 40% above pre-pandemic levels. With construction spending down for the past two months, the industry eagerly awaits lower interest rates. Given recent economic turmoil, the Federal Reserve will begin cutting rates at its September meeting.”