Construction Backlog Indicator Rises in Sept. - Modern Distribution Management

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Construction Backlog Indicator Rises in Sept.

Backlog is once again above the level observed at the start of the pandemic, according to the Associated Builders and Contractors.
Silhouette engineer standing orders for construction crews to wo

The construction backlog indicator increased to nine months in September from 8.7 months in August, according to a member survey conducted Sept. 20 to Oct. 5 by the Associated Builders and Contractors.

The reading is up 1.4 months from September 2021. The backlog is again above the level observed at the start of the pandemic (8.9 months in February 2020), according to ABC, which also analyzes federal data related to construction.

Backlog in the heavy industrial segment jumped from 7.4 months in August to 8.5 months in September due to 21.5% year-over-year increase in manufacturing-related construction spending, according to ABC.

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels all remained above the threshold of 50, indicating expectations for growth over the next six months.

“The construction confidence and backlog metrics appear strong despite the U.S. economy facing headwinds like inflation, financial market volatility and rapidly rising borrowing costs,” ABC chief economist Anirban Basu said. “Contractors remain decidedly upbeat, with backlog expanding and expectations for rising sales, employment and profit margins over the next six months.

“One would think the recent surge in interest rates would be enough to dampen contractor confidence. Instead, project owners continue to move forward with a significant number of projects. Faced with high demand for their services, contractors continue to show pricing power, helping to offset rising compensation and other construction delivery costs.”

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