The Associated Builders and Contractors Backlog Indicator reached 8.1 months in February, according to a survey of association members. The portfolio increased 0.1 months in January, while it fell 0.2 months year-on-year.
“The backlog recovered from a four-year low in January, but remains small by historical standards,” ABC chief economist Anirban Basu said in a statement.
By sector, while infrastructure had the highest portfolio at 8.9 months, the figure was down from 10 months in January. Heavy industry, at 8 months, had the highest monthly increase at 2.2 months. Regionally, the largest increase was in the middle states, up one month from January.
“It’s notable that portfolio growth has been limited to the Middle States region,” Basu said. “After struggling in the immediate aftermath of the pandemic, the Midwest has seen surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity.”
ABC’s Contractor Confidence Index, which tracks confidence in sales, profit margins and staffing levels, shows all three components reading above 50, meaning growth is expected to continue. However, while confidence in sales and staffing levels rose in February, the reading on profit margins has declined.
“While contractors remain mildly optimistic that their profit margins will widen over the next six months, this confidence may not survive the recent sharp rise in oil prices,” Basu said.
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