Confidence for sales, profit margins, and staffing levels declined in July, according the Construction Confidence Index published by Associated Builders and Contractors.
“Contractor confidence regarding profit margins now stands at the lowest level since November 2022, which comes as little surprise," said Anirban Basu, chief economist, in a statement. “There are now strong indications that elevated interest rates have finally taken their toll on a number of privately financed construction segments as well as the broader economy.
“While inflation has moderated in recent months, construction materials prices remain almost 40% above pre-pandemic levels,” said Basu, who has said the country is heading for recession. “With construction spending down for the past two months, the industry eagerly awaits lower interest rates. Given recent economic turmoil, the Federal Reserve will begin cutting rates at its September meeting.”
All three indices remain above the threshold of 50, however, indicating expectations of growth over the next several months.
ABC also reported that its Construction Backlog Indicator held steady at 8.4 months in March, according to a member survey conducted between July 2022 to August 6. The reading is down 0.9 months from July 2023.
