Dive Brief:
- Construction backlog held steady at 8.4 months in November, reflecting resilience in the pipeline amid ongoing economic uncertainty, according to an Associated Builders and Contractors survey conducted from Nov. 20 to Dec. 3
- Contractors expect a rebound in privately financed projects, buoyed by optimism surrounding potential cuts to borrowing costs and increased policy clarity following the presidential election, according to the report.
- Infrastructure backlog remains a standout, posting year-over-year gains despite declines in other categories, according to ABC.
Dive Insight:
The news underscores the ongoing buoyancy of the construction sector, despite economic and political shifts, said Anirban Basu, ABC chief economist.
“Contractor confidence surged in November even though backlog was unchanged for the month,” said Basu. “This sudden improvement in confidence reflects increased policy certainty in the wake of November’s presidential election, and contractors are optimistic about the prospect of falling borrowing costs over the next several quarters.”
By sector, backlog showed mixed movement in November, according to ABC. Infrastructure backlog fell 0.2 months compared to October but remains a standout with a 0.8 month increase over the past year.
Heavy industrial backlog jumped 0.6 months in November, but remains down 0.1 months compared to November 2023. Commercial and institutional backlog posted no change from October and is down 0.1 months over the past 12 months.
Contractors’ expectations for increased activity in privately funded projects over the next six months hinge on further reductions in interest rates, said Basu. If these cuts materialize, developers could revive delayed or shelved projects.