ABC’s Construction Backlog Indicator Falls To Four-Year Low in January; Contractor Confidence Grows

Associated Builders and Contractors reported today that its Construction Backlog Indicator fell to 8.0 months in January, according to an ABC member survey conducted Jan. 20 to Feb. 3. The reading is down 0.2 months from December and 0.4 months from January 2025.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog continues to hold up better for larger contractors, rising over the past year for contractors with greater than $50 million in annual revenues while falling sharply for those with revenues below that threshold. 

ABC’s Construction Confidence Index reading for sales, profit margins and staffing levels increased again in January. Sales expectations are better than they were one year ago, while profit margin and staffing expectations are slightly worse. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Backlog fell to a four-year low in January, yet contractors remain shockingly sanguine about the near-term outlook,” said ABC Chief Economist Anirban Basu. “Just 13% of contractors expect their sales to decrease over the next six months, the smallest share since February 2022. Despite that personal confidence, ABC members are far less optimistic about their competition; 46% of contractors expect that other contractors will see their sales decline over the next two quarters. Whether or not this personal optimism is justified will likely depend on the extent to which borrowing costs can decline in 2026.”