Construction industry leaders’ confidence rose in November, according to www.abc.org.
Two of the three components increased for the month, and all components remained above the diffusion index threshold of 50.
In November, the Associated Builders and Contractors’ Construction Confidence Index increased from 58.9 to 63 for staffing levels and from 50.4 to 50.5 for profit margin expectations. The index decreased from 57.2 to 56.8 for sales expectations.
Additionally, ABC’s Construction Backlog Indicator increased to 9.2 months in November, which is 0.8 months higher than in November 2021 and the highest level since the second quarter of 2019.
“The rise in backlog is remarkable and unexpected,” said ABC Chief Economist Anirban Basu. “A number of contractors have been reporting that their backlog has risen rapidly over the past three months, which is counterintuitive given the pervasive view that the broader economy is headed into recession.
“The improvement in backlog was particularly sharp in the commercial and institutional category, and health care-related construction has emerged as a major driver of new activity,” Basu continued. “While it seems unlikely that backlog will hold up in the face of the Federal Reserve’s efforts to slow demand, many predicted that backlog would have dipped by now and that has yet to transpire. What’s more, many contractors expect sales and staffing levels to climb over the next six months, while profit margins are projected to remain stable.”
