Combo Graph Jan 23

ABC: Contractor Backlogs Slip, Confidence Climbs to Start 2023

Feb. 14, 2023
Latest contractor survey saw backlogs decline in January, but overall confidence re sales, profit margins and staffing levels all inched upward from December.

PRESS RELEASE 

WASHINGTON, Feb. 14, 2023 — Associated Builders and Contractors (ABC) reports today that its Construction Backlog Indicator (CBI) declined 0.2 months to 9.0 in January, according to an ABC member survey conducted Jan. 20 to Feb. 3. The reading is 1.0 month higher than in January 2022.

Even though the CBI declined in January, it remains elevated by historical standards and is 0.1 months higher than in February 2020, the month before the COVID-19 pandemic began to impact the economy.

ABC’s Construction Confidence Index (CCI) reading for sales, profit margins and staffing levels increased in January. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.

“Despite extremely elevated borrowing costs, worker shortages and a generally downcast economic outlook, contractor confidence rebounded in January to a level not seen since the first half of 2022,” said ABC Chief Economist Anirban Basu. “Given the recent employment report, the U.S. economy continues to fend off recession. Some economists have concluded that rather than a hard or soft landing, the U.S. economy is headed for ‘no landing,’ meaning that economic growth will continue despite rising interest rates.

“However, the incredibly strong January jobs report makes it more likely that the Federal Reserve will maintain higher borrowing costs for a longer period,” added Basu. “Eventually, that could cause the economic expansion to unravel, perhaps later this year. That could set the stage for diminished backlog and less confidence for contractors that specialize in privately financed projects as 2024 approaches.”

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 22,000 members. Founded on the merit shop philosophy, ABC and its 68 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.

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Contact: Erika Walter, ABC | (202) 905-2104 | [email protected]