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Construction Contractor Confidence and Backlogs Strong

Published on by Erik Wurtenberger in Construction

Construction Contractor Confidence and Backlogs Strong

According to Associated Builders and Contractors (“ABC”), industry leaders are expecting increases per the Construction Confidence Index (“CCI”) in the following areas of their businesses:

  • Sales
  • Profit Margins
  • Staffing levels

The CCI is a diffusion index where readings over 50 indicate growth, and readings under 50 are unfavorable.  Visit the ABC News Releases web page for the most up to date CCI indexes available for the construction industry.

ABC has several construction economics metrics that are updated throughout the year.  These include a Construction Backlog Indicator, Construction Confidence Index, Construction Spending, Employment, State Unemployment, and Materials Prices.

The backlog indicator for the end of 2019 had fallen slightly to 8.8 months largely due to concerns surrounding seasonal factors, as well as the economy, did not see the effects of trade disputes until later in 2019 per ABC chief Economist Anirban Basu.  Heading into 2020 Basu feels these concerns have lessened due to the US economy adding jobs, the first phase trade agreement with China is in place, and stock prices have increased.  This should bid well for a strong first quarter for construction contractors.

However, as Basu states, the backlog can be limited for many contractors as finding skilled workers is still a challenge and can limit a contractor’s capacity to do additional work.

Construction input prices are up approximately 1.0% year over year as of December 2019 per ABC.  Natural gas prices have experienced the largest year over year decrease at approximately 49% per ABC.  Among the 11 subcategories of the material prices reported by ABC, seven experienced year over year decreases.  According to a recent ABC News Release, monthly construction input prices went up in December and are forecasted to continue to rise, read the full new release here for a full report on the material prices headed into 2020.  Prices are expected to increase as demand is expected to be high in the first half of 2020.

Below is a list of additional Resources on the ABC website to help contractors plan in 2020:

Barnes Dennig also has a number of resources that can help Contractors run their business:

  • Dedicated Construction Team – Our team of dedicated construction professionals understands the needs and nuances of the construction industry. Read more about services Barnes Dennig provides to contractors here.
  • Construction Compensation, Benefits, and Benchmarking Study – Do you wonder what fellow contractors pay by position? What compensation and bonus strategies they utilize? What issues they are struggling with today? Our biennial construction compensation, benefits, and benchmarking study looks at these trends and much more. Request the study here, and let us know if you want to participate in the 2020 edition here.
  • Questions – Our construction team is always ready to answer your questions, and help with all aspects of your business. Have a construction team member reach out to you at no cost to learn why Barnes Dennig is one of the largest and most experienced resources to contractors in the region.


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