Construction industry leaders remained optimistic in December 2024, according to Associated Builders and Contractors.
Two of the three components of ABC’s Construction Confidence Index increased for the month and all three were above the diffusion index threshold of 50.
In December 2024, ABC’s Construction Confidence Index increased from 63.3 to 64.2 for sales expectations and from 62.5 to 63.2 for staffing levels. The index fell from 55.3 to 54.3 for profit margin expectations.
Additionally, ABC’s Construction Backlog Indicator fell from 8.4 months in November 2024 to 8.3 months in December 2024, which is down 0.3 months from December 2023.
“While backlog inched lower in December, contractors broadly expect construction activity to pick up in the first half of this year," said ABC Chief Economist Anirban Basu. “Contractor confidence remained extraordinarily elevated in December, with the share of contractors that expect their sales to increase over the next six months now at the highest level since early 2022. Despite that confidence, the path of interest rates will play a critical role in industry performance in 2025. If rates remain higher for longer, backlog may remain subdued, especially in the struggling commercial and institutional category.”
