ABC Construction Backlog and Contractor Confidence Rebound in November

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels increased in November. All three indices stand above the threshold of 50, indicating expectations of growth over the next six months.

Associated Builders and Contractors reports that its Construction Backlog Indicator rose to 8.4 months in November, according to an ABC member survey conducted Nov. 19 to Dec. 3. The reading is up 0.3 months from October 2021 and 1.2 months from November 2020.

“It’s getting better out there,” said ABC Chief Economist Anirban Basu. “While the outlook for construction remains imperfect, extraordinarily low interest rates have created enough appetite for deal-making to push backlog higher and persuade the average contractor that sales, employment and profit margins will climb over the next six months.

“Optimistic expectations are a testament to how strong deal flow remains in stimulus-driven America,” said Basu. “The infrastructure package passed in November is another reason for optimism, particularly for contractors who work in segments like roads and bridges, water and sewer and mass transit. It is likely that industry circumstances will improve further in 2022, especially if supply chain disruptions and input shortages become less severe, which many economists anticipate by the second half of next year.”

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.