Construction industry leaders’ confidence fell in May but remains elevated, according to Associated Builders and Contractors.
Two of the three components decreased for the month, but all components remained above the diffusion index threshold of 50.
In May, ABC’s Construction Confidence Index decreased from 61.7 to 60.1 for sales expectations and 64.2 to 61.7 for staffing levels. The index rose from 53.5 to 55.1 for profit margin expectations.
Additionally, ABC’s Construction Backlog Indicator was unchanged at 8.9 months in May, which is 0.1 months lower than in May 2022.
“During a period of ongoing tumult associated with major bank failures, a near-miss debt ceiling crisis and shifting monetary policy, nonresidential construction backlog has remained remarkably stable,” said ABC Chief Economist Anirban Basu. “At nearly nine months, backlog is essentially unchanged from a year ago and the previous month.
“Moreover, contractor confidence remains elevated despite massive increases in cost of capital and growing concerns over the nation’s commercial real estate segment, with firms indicating sufficient demand and associated pricing power that will keep profit margins steady or better,” Basu continued. “Contractors also expect to bring on additional talent over the next six months, an indication of ongoing industry expansion.”
