Dive Brief:
- The construction backlog remained stable at 8.4 months in November, reflecting resilience in the making amid ongoing economic uncertainty, according to a survey of builders and associated contractors conducted from Nov. 20 to Dec. 3.
- According to the report, contractors expect a rebound in privately financed projects, driven by optimism about possible cuts in borrowing costs and greater political clarity after the presidential election.
- The infrastructure portfolio remains a standout, with year-on-year gains despite declines in other categories, according to ABC.
Diving knowledge:
However, the news underlines the dynamism of the construction sector economic and political changessaid Anirban Basu, ABC’s chief economist.
“Contractor confidence rose in November even though the job backlog was unchanged for the month,” Basu said. “This sudden improvement in confidence reflects greater political certainty in the wake of November’s presidential election, and contractors are optimistic about the prospect of falling borrowing costs over the coming quarters.”
By sector, the portfolio showed mixed movement in November, according to ABC. The infrastructure portfolio fell 0.2 months compared to October, but remains outstanding with an increase of 0.8 months over the past year.
The heavy industrial portfolio increased 0.6 months in November but remains down 0.1 months compared to November 2023. The commercial and institutional portfolio was unchanged from October and is down 0.1 months for the last 12 months.
Expectations of contractors to increase activity a projects with private financing over the next six months will depend on further cuts in interest rates, Basu said. If these cuts materialize, developers could revive delayed or abandoned projects.
