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Associated Builders and Contractors' Construction Backlog Indicator fell to 7.8 months in April, the series’ lowest reading since the third quarter of 2012. Yet, based on an ABC member survey conducted April 20-May 4, confidence among U.S. construction industry leaders inched higher last month compared to the historically low levels observed in the March survey.
Nonresidential construction backlog is down 0.4 months compared to the March 2020 survey and 1.7 months from April 2019. Backlog has declined year-over-year in every industry classification, region and company size. Backlog in the infrastructure category has been stable, however, and reached its highest level since December 2019.
That said, ABC’s Construction Confidence Index (CCI) readings for sales, profit margins and staffing levels expectations all increased from the historically low levels reported in the March 2020 survey. While sales and profit margin expectations remain below the threshold of 50, indicating ongoing expectations of contraction, the staffing level index rose to 51.4 in April, indicating positive hiring expectations over the next six months.
- The CCI for sales expectations increased from 38.1 to 41.1 in April.
- The CCI for profit margin expectations increased from 36.6 to 39.8.
- The CCI for staffing levels increased from 45.2 to 51.4.
“Given the large quantity of businesses that will likely not survive the public health and economic crisis, demand for construction services could be suppressed for quite some time,” said Basu. “Vacant storefronts, empty office suites and shattered state and local government finances do not serve as a solid foundation for robust demand for construction services. For construction activity to rebound briskly, the federal government is going to have to step forward and provide substantial assistance to state and local governments, including to finance infrastructure improvements.”