The construction backlog indicator for builders and associated contractors fell to a four-year low in January, declining 0.2 months from December, at an 8-month reading. Since January 2025, the portfolio has been reduced by 0.4 months.
By category, infrastructure has the strongest portfolio at 10 months, up 2 months year-to-date and 0.9 months since December, while heavy commercial and institutional and industrial portfolios saw year-over-year and month-over-month declines.
Despite this, “contractors remain surprisingly optimistic about the near-term outlook,” ABC chief economist Anirban Basu said in a statement. “Only 13% of contractors expect their sales to decline over the next six months, the smallest share since February 2022.”
Participants in ABC’s Construction Confidence Index survey reported an increase in expectations for all three categories (sales, profit margins and staffing) since December. However, Basu said, “ABC members are much less optimistic about their competition; 46% of contractors expect other contractors to see their sales decline over the next two quarters. Whether or not this personal optimism is justified will likely depend on how much borrowing costs can decline in 2026.”
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