Construction industry leaders’ confidence fell in January, according to www.abc.org.
All three components dropped for the month but remained above the diffusion index threshold of 50.
In January, the Associated Builders and Contractors’ Construction Confidence Index decreased from 57.4 to 56.9 for profit margin expectations; 64.6 to 63.9 for staffing levels; and 66.3 to 66.2 for sales expectations.
Additionally, ABC’s Construction Backlog Indicator fell from 8.2 months in December 2021 to 8.0 months in January.
“Despite the Omicron variant, ongoing supply chain issues, elevated energy and materials prices and rampant staffing shortages, the average nonresidential contractor remains upbeat,” said ABC Chief Economist Anirban Basu. “Perhaps the most remarkable aspect of the survey findings is the expectation that industry profit margins will expand during coming months, implying that contractors expect to pass along enough price increases to project owners to countervail the rising costs of construction service delivery.
“The last two months have indicated declining backlog, but the dips are not cause for particular concern,” Basu continued. “Declining backlog indicates that some projects are postponed or canceled in response to rising costs and/or extended delivery timelines. The principal challenge for contractors remains a lack of sufficiently skilled labor, a structural issue that will not go away soon and a circumstance contractors have dealt with for years. The situation is likely to deteriorate further as federal infrastructure dollars begin affecting the economy more forcefully in the near future.”
