Construction industry leaders were less confident in July, according to Associated Builders and Contractors.
All three components of ABC’s Construction Confidence Index decreased for the month but remained above the diffusion index threshold of 50.
In July, ABC’s Construction Confidence Index decreased from 53.6 to 50.6 for profit margin expectations; from 59.4 to 57.4 for sales expectations; and from 61.3 to 58.8 for staffing levels.
Additionally, ABC’s Construction Backlog Indicator held steady at 8.4 months from June to July, which is down 0.9 months from July 2023.
“Contractor confidence regarding profit margins now stands at the lowest level since November 2022, which comes as little surprise,” said ABC Chief Economist Anirban Basu. “There are now strong indications that elevated interest rates have finally taken their toll on a number of privately financed construction segments as well as the broader economy.
“While inflation has moderated in recent months, construction materials prices remain almost 40% above pre-pandemic levels,” Basu continued. “With construction spending down for the past two months, the industry eagerly awaits lower interest rates. Given recent economic turmoil, the Federal Reserve will begin cutting rates at its September meeting.”
