Listen to the article 2 min

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

• Despite the threat of tariffs, construction backlog rose to its highest level since September 2023 and contractors' confidence in their future profit margins grew, according to an Associated Builders and Contractors survey April 22 to May 6.
• Backlog has increased significantly over the past year for contractors with greater than $100 million in annual revenues, according to ABC. Though backlog has also risen modestly for the smallest contractors, it is down year-over-year for those with $30 million to $100 million in annual revenues.
• “Nearly 22% of contractors had a project delayed or canceled in April due to tariffs, up from 18% in March, while 87% have been notified of tariff-related materials prices increases,” said Anirban Basu, ABC chief economist.

Dive Insight:

The survey is a look into how contractors are viewing their businesses following President Donald Trump’s tariff saga and the whiplash some builders have felt following the introduction of those policies.

Basu said that despite these headwinds, contractors are keeping busy. Even so, there are signs that builders are bracing for the future.

“While ABC members remain upbeat about the near-term outlook, the share of respondents that expect their sales to decline over the next six months rose to 19% in April, up 6 percentage points since the start of the year,” Basu said.

Although commercial and institutional construction saw a slight gain in backlog, both heavy industrial and infrastructure work dropped, a departure from the previous month’s reading.

In addition, profit margin expectations improved in April, as the readings for sales and staffing levels fell, though the outlook for sales is still higher than a year ago, according to ABC. The readings for all three components remained above the threshold of 50, indicating respondents expect growth over the next six months.

Right now, data centers are dominating the overall construction planning market, according to the April iteration of the Dodge Momentum Index, but other segments remained subdued.