On July 11, Associated Builders and Contractors reported that its Construction Backlog Indicator remained unchanged at 8.9 months in June, according to a member survey conducted June 20 to July 5.
The reading is unchanged from June 2022, according to ABC.
Backlog in the infrastructure category increased for the third straight month and is now at the highest level in nearly two years. The southern U.S. remains the region with the highest backlog, despite being the only region in which backlog declined in June.
“Backlog once again remained stable in June despite tight credit conditions and high interest rates,” said ABC Chief Economist Anirban Basu. “While those risk factors drove a decline in all three Construction Confidence Index series, contractors continue to signal an expectation that sales, profit margins and staffing will expand over the second half of 2023. Many aspects of the economy, including consumer spending and the labor market, held up better than expected in the second quarter,” said Basu. “That bodes well for economic growth over the summer, but also suggests that the Federal Reserve may raise rates higher and keep them there longer in their ongoing efforts to suppress inflation. All else equal, that will reduce construction activity in the quarters to come.”