Construction industry leaders remained confident in June, according to Associated Builders and Contractors.
Two of three components of ABC’s Construction Confidence Index decreased for the month but all remained above the diffusion index threshold of 50.
In June, ABC’s Construction Confidence Index increased from 51.7 to 53.6 for profit margin expectations. The index decreased from 59.9 to 59.4 for sales expectations and from 61.6 to 61.3 for staffing levels.
Additionally, ABC’s Construction Backlog Indicator increased from 8.3 months in May to 8.4 months in June, which is down 0.5 months from June 2023.
“Backlog continues to hold up remarkably well despite high interest rates, inflation and emerging weakness in the broader economy," said ABC Chief Economist Anirban Basu. “While contractor confidence regarding the outlook for sales and staffing levels fell modestly in June, all three Construction Confidence Index components are higher than they were one year ago.
“The combination of slowing inflation and softening growth suggests that the Federal Reserve may begin to lower interest rates as soon as September,” Basu continued. “That will buoy backlog as some of the softer construction segments, like office and commercial, benefit from lower borrowing costs and looser lending standards.”
