U.S. Construction Backlog Slips in October

The Associated Builders and Contractors (ABC) Construction Backlog Indicator fell to 8.4 months in October, down 0.1 months from September and unchanged from a year ago, according to an ABC member survey conducted Oct. 20 – Nov. 4.

Backlog levels were steady or higher across major industry segments, but smaller firms and contractors without a primary industry focus saw a sharp monthly decline, with backlog dropping to 5.8 months.

ABC’s Construction Confidence Index showed sales expectations holding steady, while confidence in profit margins and staffing levels declined. All three measures remained above 50, the threshold signaling anticipated growth over the next six months.

“Nearly 65% of contractors indicated that they think the U.S. construction industry is contracting, according to ABC’s October survey,” said ABC Chief Economist Anirban Basu. “This dismal assessment accompanied the lowest backlog reading since May, and 23% of contractors expect their sales to decline over the next six months, the highest share in over a year. These findings are consistent with an industry that is sustained by still-elevated manufacturing construction and a surging data center sector. Approximately 1 in 7 contractors are under contract to work on data centers, and those contractors have significantly higher backlog (10.9 months) than those that are not (8.0 months).”