Associated Builders and Contractors recently released some significant data regarding the construction industry. According to an ABC member survey conducted from Nov. 20 to Dec. 3, their Construction Backlog Indicator remained at 8.4 months, showing no change from the previous month. It's interesting to note that this reading is actually down by 0.1 months compared to November 2023.
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When looking at the data in detail, it was observed that the backlog in the infrastructure category contracted in November. However, it's still the only category that has a higher backlog on a year-over-year basis. This indicates a unique situation within the construction market.ABC's Construction Confidence Index Improvements
In November, ABC's Construction Confidence Index readings for sales, profit margins, and staffing levels all showed improvement. What's more, the readings for all three components remained above the crucial threshold of 50, which clearly indicates that contractors are expecting growth over the next six months. As ABC Chief Economist Anirban Basu pointed out, "Contractor confidence surged in November even though backlog was unchanged for the month." This sudden boost in confidence can be attributed to the increased policy certainty following the November presidential election. Contractors are now optimistic about the prospect of falling borrowing costs in the coming several quarters. Despite the fact that backlog contracted in the commercial and institutional and heavy industry categories last month, they still expect increased activity in privately financed segments during the next six months.LBM Resources and Their Impact
Although the main focus was on the Construction Backlog Indicator and Construction Confidence Index, it's also important to consider the role of LBM Resources. While not directly related to the core indicators, they may have an indirect influence on the construction industry. Further research and analysis could potentially uncover more about their significance.
