Dive Brief:
- Construction backlog increased to 8.8 months in July, up 0.4 months from a year ago, according to an Associated Builders and Contractors survey conducted July 24 to Aug. 4.
- Backlog increased year-over-year in every region except for the South, which still holds the longest pipeline in the country.
- Contractor confidence around sales and profit margins slipped in July, though staffing expectations climbed to their highest level since April, according to the report.
Dive Insight:
The July uptick arrives as contractors face growing pressures on their bottom lines amid tariff-related cost increases, said Anirban Basu, ABC chief economist
“While backlog rose, contractor confidence slipped in July, especially with regards to profit margins,” said Basu in the release. “Fewer than 2% of ABC members expect their profit margins to increase significantly over the next six months, the fewest since October 2024.”
More than 80% of ABC members reported receiving supplier notices of higher prices, a trend Basu tied to trade policy and recent materials cost escalation. That likely is hampering overall construction spending levels, which slipped again in June for the sixth time in seven months.
Nevertheless, public construction and the ongoing data center surge continue to help offset some of that strain. For example, though sales and profit margins expectations declined in July, the readings still indicate anticipation for growth over the next six months.
“Some of that strength can be attributed to the fact that one in every eight ABC members is currently under contract to perform work on a data center project,” said Basu. “Backlog in the infrastructure category has also increased considerably over the past year, and public construction activity has outperformed the private sector over the past several months.”
