Contractors surveyed by the Associated Builders and Contractors (ABC) report a slight increase in expectations for profit margin growth, according to the organization’s Construction Confidence Index. The index, which has a threshold of 50, registered a confidence level of 50.9 for profit margins in September.

“Contractor confidence rebounded in September,” stated Anirban Basu, ABC's chief economist. “While the reading for profit margins briefly dipped below the threshold of 50 in August, indicating net expectations of contraction, contractors are back to expecting modest expansion in their margins as of September. This optimism likely reflects falling interest rates, which will eventually serve as a tailwind for the industry, and the fact that materials prices have actually declined over the past year. Despite the improved outlook in September, contractor confidence is worse and backlog shorter than one year ago, suggesting that the effects of high interest rates continue to weigh on the industry.”

ABC’s Construction Backlog Indicator increased to 8.6 months in September, a decrease of 0.4 months compared to September 2023.

Only the infrastructure sector saw a monthly decline in backlog among the three major segments. However, over the past year, backlog has decreased in all segments except for heavy industrial.