Backlog in infrastructure projects inched down to 8.3 months in December, 0.3 months down compared to a year ago, according to an Associated Builders and Contractor's (ABC) member survey conducted Dec. 20 to Jan. 6.
Backlog was down on a monthly basis for all categories of company size except for those earning less than $30 million in annual revenue.
Backlog in the commercial and institutional category has fallen by almost a full month over the past year and is now at the lowest level since February 2023.
ABC’s Construction Confidence Index readings for sales and staffing levels improved in December, while the reading for profit margins declined. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
“While backlog inched lower in December, contractors broadly expect construction activity to pick up in the first half of this year," said Anirban Basu, ABC Chief Economist, in a statement. “Contractor confidence remained extraordinarily elevated in December, with the share of contractors that expect their sales to increase over the next six months now at the highest level since early 2022. Despite that confidence, the path of interest rates will play a critical role in industry performance in 2025. If rates remain higher for longer, backlog may remain subdued, especially in the struggling commercial and institutional category.”
