Contractors Expect Sales, Employment, Profits to Grow Over Next Six Months

A report released by the Associated Builders and Contractors says contractors have high optimism for the months ahead, and few worries about a potential recession.

Abc Combo Graph Aug 22 This One
Associated Builders and Contractors (ABC)

The Associated Builders and Contractors (ABC) Contractor Confidence report released Sept. 13 show a strong backlog and high contractor confidence, despite talk of a potential economic recession. The report is based on ABC member surveys conducted from Aug. 22 to Sept. 7. 

“Despite the high risk of recession, contractors collectively expect sales, employment and profit margins to grow over the next six months,” said ABC Chief Economist Anirban Basu. “Backlog is down from the cyclical peak in early 2022 and has been roughly flat in recent months."

Basu said the nonresidential construction market has remained remarkably buoyant. 

“Rising interest rates have already driven the single-family homebuilding market into recession, but brisk nonresidential activity continues," Basu said. Many nonresidential contractors are operating at capacity, and their principal frustrations relate to supply-side issues like worker shortages, equipment delivery delays and elevated materials prices, as opposed to demand for their services.”

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels increased in August. The index for profit margins bounced back into positive territory while the sales and staffing level indices remained above 50, indicating expectations of growth over the next six months, according to the organization.

Abc Cci Table Aug 22Associated Builders and Contractors (ABC)

ABC's Construction Backlog Indicator (CBI) sits at 8.7 months, same as it was in July, and up from the 7.7 months reading in August 2021. According to ABC, backlog is down from second quarter 2022 numbers, but remains higher than at any point from March 2020 to March 2022. While the CBI reading fell for contractors in the South in August, it remains the U.S. region with the lengthiest backlog.

Abc Cbi Table Aug 22Associated Builders and Contractors (ABC)