Construction industry leaders were less optimistic in November, 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 November, ABC’s Construction Confidence Index decreased from 51.3 to 51.1 for profit margin expectations and from 60.1 to 58.2 for staffing levels. The index rose from 59.6 to 59.8 for sales expectations.
Additionally, ABC’s Construction Backlog Indicator fell from 8.4 months in October to 8.1 months in November and was down 0.3 months compared with November 2024.
“Backlog declined sharply in November and is now at the lowest level since February 2024,” said ABC Chief Economist Anirban Basu. “The decline was particularly steep for the smallest contractors; ABC members with under $30 million in annual revenues registered their lowest backlog reading in over four years. Notably, fewer than 6% of those smallest contractors are under contract to work on data center projects, well below the 37% share for contractors with greater than $100 million in annual revenues.
“Despite the decline in backlog, contractors remain broadly optimistic that their sales and staffing levels will expand over the next six months,” Basu continued. “At the same time, just 33.6% of contractors expect their profit margins to expand over the next two quarters, the lowest share in over a year. That likely reflects growing anxiety about materials costs, which have started to rise after several quarters of relative stability.”
