Construction industry leaders’ confidence strengthened in April, according to Associated Builders and Contractors.
Two of the three components increased for the month, and all components remained above the diffusion index threshold of 50.
In April, ABC’s Construction Confidence Index increased from 61.3 to 61.7 for sales expectations and 62.6 to 64.2 for staffing levels. The index fell from 53.8 to 53.5 for profit margin expectations.
Additionally, ABC’s Construction Backlog Indicator rose from 8.7 months in March to 8.9 months in April, which is 0.1 months higher than in April 2022.
“Based on ABC member sentiment, one would not be able to discern that interest rates are high, the nation’s banking sector is in tumult, politicians are arguing over the nation’s debt limit and recession fears remain pervasive,” said ABC Chief Economist Anirban Basu. “Despite many headwinds and an active news cycle, contractors continue to express confidence in the near term.
“Still, there is some evidence of a shift,” Basu continued. “With credit conditions tightening, expectations are that private construction is poised for weaker times ahead. Nonetheless, backlog expanded in April as infrastructure contractors began to take on more public works projects. Moreover, despite rapidly rising compensation costs, more ABC contractors expect profit margins to expand as opposed to recede over the next six months, evidence of sufficiently strong demand for construction services to support pricing power.”
