Some construction industry leaders were less optimistic in May amid tariff-related project delays and cancellations, 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 May, ABC’s Construction Confidence Index increased from 53.1 to 53.3 for profit margin expectations; fell from 62.6 to 61.7 for staffing levels; and fell from 62.1 to 60.4 for sales expectations.
Additionally, ABC’s Construction Backlog Indicator fell from 8.7 months in April to 8.4 months in May and increased 0.1 months from May 2024.
“The impacts of tariffs are increasingly apparent, with nearly 1 in 4 ABC member contractors reporting tariff-related project cancellations or delays in May,” said ABC Chief Economist Anirban Basu. “While 87% of survey respondents have been notified of tariff-related materials price increases, profit margin expectations actually improved in May.
“Of course, this survey was largely conducted prior to the announcement of the now-implemented 50% steel and aluminum tariffs, and margins will likely come under pressure in the coming months,” Basu continued. “Despite this potential headwind, approximately 6 out of 10 contractors expect their sales to increase over the next two quarters, suggesting widespread optimism about the outlook.”
