Dive Brief:
- Construction backlog declined to 8.3 months in February, down about 1% from January, according to an Associated Builders and Contractors survey conducted from Feb. 20 to March 5.
- Work in builders’ pipelines fell for contractors with less than $100 million in annual revenue, while firms with over $100 million in sales booked more work, softening the drop.
- Overall contractor confidence held firm in February even as profit margin expectations declined and sales expectations stayed level, according to ABC.
Dive Insight:
The decline in February’s backlog highlights a growing divide between large and small contractors, according to the report.
Larger firms, or those with over $100 million in revenue, are expanding their project pipelines. Public construction firm executives recently brushed off tariff and policy concerns, citing strong demand for massive infrastructure, data centers and energy projects.
Smaller firms, on the other hand, face headwinds as backlog declines. Nevertheless, the industry still expects a bounceback in business conditions this year.
“While many other economic sentiment readings have deteriorated in recent months, contractors remain optimistic that business conditions will improve through the first half of 2025,” said Anirban Basu, ABC chief economist, in the release.
Despite the decline in backlog, hiring expectations jumped over the course of the month, according to ABC. Its survey showed nearly 60% of contractors plan to increase staffing levels over the next six months.
That’s the highest metric for contractors planning to add to their payrolls in over two years, said Basu.
“These hiring expectations suggest that the recent slowdown in industrywide employment is largely confined to the residential segment,” said Basu in the release. “Yes, there are some broader signs of emerging economic weakness, but the results of this ABC member survey suggests that contractors will remain busy over the next few quarters.”
