Construction backlog posts gains to kick off the year

Dive Temporary:

• Construction backlog increased to 8.4 months in January, reversing December’s slight decline, based on an Related Builders and Contractors survey performed from Jan. 21 to Feb. 3. The metric tracks the amount of labor in builders’ pipelines.
• The Western area posted the biggest backlog progress, each on a month-to-month and year-over-year foundation, whereas the South maintained the longest backlog at 9.5 months, regardless of seeing the steepest decline over the previous 12 months.
• Contractor confidence remained sturdy, with gross sales and revenue margin expectations rising, although staffing degree expectations fell, based on ABC.

Dive Perception:

The backlog improve in January displays continued stability in construction activity as contractors enter 2025, stated Anirban Basu, ABC chief economist, within the launch. 

“Whereas backlog has remained inside a slim vary over the previous 12 months, contractors broadly anticipate building exercise to select up over the following six months,” stated Basu. “Contractor confidence concerning gross sales has improved considerably over the previous 12 months, with a lot of that enchancment occurring since November’s election.”

Although confidence in gross sales and revenue margins continues to remain sturdy, the dip in staffing expectations comes after a sharp decline in job openings in late 2024. Open building jobs fell by 55,000 to 217,000 in December in comparison with November, based on Bureau of Labor Statistics knowledge.

Basu famous, nevertheless, that each one three readings stay above ABC’s threshold of fifty, indicating expectations for progress over the following six months. Which means hiring demand may bounce again sooner fairly than later.

“The truth that staffing degree expectations stay elevated means that job openings, which fell sharply throughout the ultimate months of 2024, ought to rebound throughout the first half of 2025,” stated Basu.