ABC’s Construction Backlog Indicator Inches Lower in May, Contractors Remain Confident

A majority of contractors expecting their sales and staffing levels to expand over the next six months.

Associated Builders and Contractors reported today that its Construction Backlog Indicator fell to 8.3 months in May, according to an ABC member survey conducted May 20 to June 4. The reading is down 0.6 months from May 2023.

View ABC’s Construction Backlog Indicator and Construction Confidence Index tables for May. View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog declined on a monthly basis for every company size except those contractors with greater than $100 million in annual revenues. On an annual basis, backlog is down for contractors of all sizes.

ABC’s Construction Confidence Index readings for profit margins and staffing levels fell slightly in May, while the reading for sales improved. All three readings remain above the threshold of 50, indicating expectations for growth over the next six months.

“Over a year has passed since the Federal Reserve raised the target range of the federal funds rate above 5%," said ABC Chief Economist Anirban Basu. "Despite widespread expectations that rates will remain elevated through at least the end of the year, contractors remain confident about the future, with a majority of contractors expecting their sales and staffing levels to expand over the next six months.

“Although backlog has been lower in 2024 than it was during 2023, it has also been stable,” said Basu. “While significant spending activity in manufacturing and infrastructure-related segments has kept contractors busy, input cost escalation has reemerged in recent months. As a result, contractor confidence regarding profit margins has fallen to the lowest level since November 2023.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, 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. 

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 23,000 members. Founded on the merit shop philosophy, ABC and its 67 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.