Dive Brief:
- Construction backlog increased to 8.4 months in January, reversing December’s slight decline, according to an Associated Builders and Contractors survey conducted from Jan. 21 to Feb. 3. The metric tracks the volume of work in builders’ pipelines.
- The Western region posted the largest backlog growth, both on a monthly and year-over-year basis, while the South maintained the longest backlog at 9.5 months, despite seeing the steepest decline over the past year.
- Contractor confidence remained strong, with sales and profit margin expectations rising, though staffing level expectations fell, according to ABC.
Dive Insight:
The backlog increase in January reflects continued stability in construction activity as contractors enter 2025, said Anirban Basu, ABC chief economist, in the release.
“While backlog has remained within a narrow range over the past year, contractors broadly expect construction activity to pick up over the next six months,” said Basu. “Contractor confidence regarding sales has improved significantly over the past year, with much of that improvement occurring since November’s election.”
Though confidence in sales and profit margins continues to stay strong, the dip in staffing expectations comes after a sharp decline in job openings in late 2024. Open construction jobs fell by 55,000 to 217,000 in December compared to November, according to Bureau of Labor Statistics data.
Basu noted, however, that all three readings remain above ABC’s threshold of 50, indicating expectations for growth over the next six months. That means hiring demand could bounce back sooner rather than later.
“The fact that staffing level expectations remain elevated suggests that job openings, which fell sharply during the final months of 2024, should rebound during the first half of 2025,” said Basu.
