Construction industry leaders remained optimistic in August, according to Associated Builders and Contractors.
Two of the three components of ABC’s Construction Confidence Index rose or were unchanged for the month, and all three were above the diffusion index threshold of 50.
In August, ABC’s Construction Confidence Index increased from 51.8 to 51.9 for profit margin expectations and remained unchanged at 60.4 for sales expectations. The index fell from 62.4 to 59.9 for staffing levels.
Additionally, ABC’s Construction Backlog Indicator fell from 8.8 months in July to 8.5 months in August and increased 0.3 months from August 2024.
“The dip in backlog observed in August is not surprising given ongoing declines in nonresidential construction spending,” said ABC Chief Economist Anirban Basu. “While backlog in the heavy industry and infrastructure categories has held up well, commercial and institutional backlog has not. With private sector projects struggling under the weight of rising materials costs, policy uncertainty and reemerging labor shortages, that category may remain weak over the next few quarters.
“About 1 in 4 contractors reported having a project delayed or canceled due to tariffs,” Basu continued. “While that is relatively stable from July, a similar share reported project delays or cancellations due to lack of funding and labor force issues. While contractor confidence was stable for the month, it will be interesting to see how long this optimism persists if the myriad headwinds facing the industry remain in place.”
