The country’s construction backlog is now at its highest level since the second quarter of 2019, according to a new report by the Associated Builders and Contractors.
ABC reported that its Construction Backlog Indicator increased to 9.2 months in November, up from 8.8 months in October and 8.4 months in November 2021.
ABC attributes the month-over-month increase to contractors with under $30M in revenue, which now have their highest backlog in over three years.
Profit margins and staffing for contractors also increased in November, ABC reported, while sales inched lower. All three of those readings for the organization’s Construction Confidence Index remain above the threshold of 50, meaning that — despite the shape of the economy — contractors are expecting growth in all of those metrics over the next six months.
“The rise in backlog is remarkable and unexpected,” ABC Chief Economist Anirban Basu said in a statement. “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.”
Many Bisnow readers indicated in a recent survey that they think a recession is coming, at least for commercial real estate if not for the economy at large.
Healthcare-related construction was a major driver of new activity, Basu added.
Construction spending during October 2022 was at an annualized rate of about $1.79T, 0.3% below the revised September total of $1.8T, the Census Bureau reported early this month. The October 2022 figure is 9.2% higher than the same month in 2021, however.