By Jenn Goodman of Construction Dive,
Associated Builders and Contractors reported Tuesday that its Construction Backlog Indicator fell to 7.5 months in September, a decline of 0.5 months from August’s reading and 1.5 months lower than last year at this time. In addition, the association’s Construction Confidence Index readings for sales and profit margins also decreased.
The September numbers trend downward in light of the fact that the numbers for backlog, sales, profit margins and staffing expectations all increased in August.
“ABC’s survey data indicate that we are in the early stages of a nonresidential construction spending downturn,” said ABC Chief Economist Anirban Basu. “With few exceptions, declines in backlog have begun to accelerate across all markets and regions.”
In terms of sectors, backlog declined the most in the infrastructure category, yet was higher in the heavy industrial category, a segment that is coming back to due to a combination of an inventory rebuilding cycle, surging e-commerce demand and reshoring of production back to the United States, Basu said.
Regionally, the declines have been most pronounced in the West, which is largely a reflection of the many challenges facing California’s economy, Basu said.
In addition, more than a third of contractors expect their sales to decline, a dramatic increase from the less than 17% recorded at the same time last year, Basu noted, and more than three-fourths of contractors expect