Contractors are anticipating increased activity in the upcoming months, with renewed optimism following the presidential election, according to the latest survey from Associated Builders and Contractors (ABC).

In January, construction backlog increased to 8.4 months, reversing a slight decline in December. This metric, which tracks the volume of work in contractors' pipelines, shows positive momentum for the industry. The data comes from an ABC survey conducted between Jan. 21 and Feb. 3.

The Western region experienced the highest growth in backlog both on a monthly and year-over-year basis. Meanwhile, the South region continued to lead in the longest backlog duration at 9.5 months, despite experiencing the steepest decline over the past year.

Contractor confidence remained high, with expectations for sales and profit margins rising. However, expectations for staffing levels showed a decline, according to ABC’s findings.

January’s increase in backlog reflects the ongoing stability in the construction industry as contractors enter the new year, explained Anirban Basu, ABC’s chief economist.

“While backlog has remained within a narrow range over the past year, contractors broadly expect construction activity to pick up over the next six months,” said Basu. “Contractor confidence regarding sales has improved significantly over the past year, with much of that improvement occurring since November’s election.”

Despite the overall optimism, there was a noticeable dip in staffing expectations, following a sharp decline in job openings at the end of 2024. According to the Bureau of Labor Statistics, open construction jobs fell by 55,000 to 217,000 in December compared to November.

However, Basu pointed out that all three key metrics — sales, profit margins, and staffing levels — remain above ABC’s threshold of 50, signaling an overall expectation of growth. “The fact that staffing level expectations remain elevated suggests that job openings, which fell sharply during the final months of 2024, should rebound during the first half of 2025,” Basu noted.

The survey results point to optimism as the industry moves into 2025, with contractors confident that the outlook for both work volume and hiring demand will improve in the coming months.

• The industry continues to see favorable conditions, despite the staffing challenges.
• ABC’s survey offers a valuable snapshot of contractor sentiment and the direction of the construction sector as it adapts to changes in the economy and the political landscape.
• As the new year progresses, contractors remain hopeful that the trends in sales, profit margins, and job openings will support growth in the sector.

For more industry trends and construction-related news, ABC’s full survey results and future reports can provide additional insights into the construction pipeline and workforce projections.

Originally reported by Sebastian Obando in Construction Dive.