ABC’s Construction Confidence Index reading for profit margins and staffing increased in November, while the reading for sales inched lower. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.

“The rise in backlog is remarkable and unexpected,” said Anirban Basu, chief economist, ABC. “A number of contractors have been reporting that their backlog has risen rapidly over the past three months, which is counterintuitive given the pervasive view that the broader economy is headed into recession.

“The improvement in backlog was particularly sharp in the commercial and institutional category, and health care-related construction has emerged as a major driver of new activity,” continued Basu. “While it seems unlikely that backlog will hold up in the face of the Federal Reserve’s efforts to slow demand, many predicted that backlog would have dipped by now and that has yet to transpire. What’s more, many contractors expect sales and staffing levels to climb over the next six months, while profit margins are projected to remain stable.”

For more information, visit www.abc.org/economics.

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.