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Dive brief:
- The construction backlog increased to 8.6 months in March, continuing a positive turn after hitting a Minimum of 4 years in Januaryaccording to Associated Builders and Contractors.
- According to the report, portfolios increased 0.5 months from February and increased 0.1 months year over year. Contractors with data center contracts, 15% of respondents, returned a performance of 10.6 months, compared to 8.3 months for 85% without such projects.
- Despite the increased backlog, the contractor’s future performance and confidence around it “depends on how quickly the conflict in Iran is resolved,” said Anirban Basu, ABC’s chief economist. “A protracted dispute will put continued upward pressure on oil prices and borrowing costs.”
Diving knowledge:
The latest backlog data suggests contractors have regained their footing after January’s shaky start to the year.
The infrastructure segment added 1.2 months to the portfolio over the past month, followed by a 0.5 month increase in the commercial and institutional categories. Only heavy industrial stocks fell during that period, according to ABC.
“The portfolio has fully recovered from the four-year low in January and, at 8.6 months, is back to levels not seen since last summer,” Basu said. “Contractors seem phased by the sharp rise in oil prices precipitated by the conflict in Iran.”
Expectations for profit margins improved to the highest level since February 2025, Basu added. Staffing expectations among contractors also saw strong growth over the past month.
“Staffing expectations, which have increased in each of the past four months, are now at their highest level since April 2022,” Basu said. “This increase is particularly surprising given that the industry’s hiring rate fell to the lowest level on record in February, although it lines up nicely with the pick-up in job growth seen in the March jobs report.”
