Construction industry leaders remained confident in September, according to Associated Builders and Contractors.
Two of the three components increased for the month and all three components remained above the diffusion index threshold of 50.
In September, ABC’s Construction Confidence Index increased from 60.7 to 62 for staffing levels and from 58.1 to 58.3 for sales expectations. Profit margin expectations fell from 55.8 to 54.
Additionally, ABC’s Construction Backlog Indicator decreased from 9.2 months in August to nine months in September, which is equivalent to September 2022.
“Construction continues to defy the downward gravitational pull of tightening credit conditions,” said ABC Chief Economist Anirban Basu. “Despite high and rising project financing costs, ABC contractor members continue to report lofty backlog, rising employment, expanding sales and stable profit margins.
“That said, industry headwinds grow in force,” Basu continued. “Interest rates are still edging higher. Political dysfunction in Washington persists. Rising worker compensation costs and lingering supply chain issues are still frustrating industry performance and profitability. The U.S. economy appears poised to slow further. If the past is any indication, that will eventually catch up to construction in the form of dissipating demand. But economists have talked about recession for more than a year, and the industry still shows substantial forward momentum. It remains to be seen whether that momentum can survive the latest set of challenges.”
