Construction industry leaders were less optimistic in July, according to Associated Builders and Contractors.
Two of the three components of ABC’s Construction Confidence Index fell for the month, but all three were above the diffusion index threshold of 50.
In July, ABC’s Construction Confidence Index increased from 59.4 to 62.4 for staffing levels—the highest level since April. The index fell from 53.5 to 51.8 for profit margin expectations and from 62.8 to 60.4 or sales expectations.
Additionally, ABC’s Construction Backlog Indicator rose from 8.7 months in June to 8.8 months in July and increased 0.4 months from July 2024.
“Backlog continued to rise in July despite the ongoing decline in construction spending,” said ABC Chief Economist Anirban Basu. “Some of that strength can be attributed to the fact that 1 in every 8 ABC members is currently under contract to perform work on a data center project. Backlog in the infrastructure category has also increased considerably over the past year, and public construction activity has outperformed the private sector over the past several months.
“While backlog rose, contractor confidence slipped in July, especially with regards to profit margins,” Basu continued. “Fewer than 2% of ABC members expect their profit margins to increase significantly over the next six months, the fewest since October 2024. This is likely due to trade policy and the recent acceleration in materials price escalation; more than 80% of ABC members have been notified of tariff-related price increases.”
