Construction industry leaders’ confidence weakened in March, according to Associated Builders and Contractors.
Two of the three components decreased for the month, but all components remained above the diffusion index threshold of 50.
In March, ABC’s Construction Confidence Index increased from 61.2 to 61.3 for sales expectations. The index fell from 55.8 to 53.8 for profit margin expectations and from 62.8 to 62.6 for staffing levels.
Additionally, ABC’s Construction Backlog Indicator fell from 9.2 months in February to 8.7 months in March, which is 0.4 months higher than in March 2022. Backlog is at its lowest level since August 2022.
“The deceleration in nonresidential construction activity may have started,” said ABC Chief Economist Anirban Basu. “With widespread fears of recession, credit conditions tightening and more decision-makers turning their attention to cost containment, new construction work may be more difficult for contractors to line up.
“While the confidence and backlog data weakened in March, they indicate a slowing of activity rather than a shift into reverse,” Basu continued. “There is a widely held view that financial conditions are tightening in the aftermath of the failures of Silicon Valley Bank and Signature Bank. To the extent that this is true, one could anticipate further slowing and less industry confidence during the months ahead.”
