Economic Indicators
Contractor Backlog Sees Slight Dip in August; But Optimism Holds Steady, ABC Says
Infrastructure and heavy industrial work offset weakness in commercial and institutional sectors but index still falls
Contractors continue to report mixed conditions in August 2025, with ABC’s Construction Backlog Indicator easing to 8.5 months while confidence measures stayed above growth thresholds.
Associated Builders and Contractors said Sept. 16 that its Construction Backlog Indicator fell to 8.55 months in August from 8.8 months in July, based on a member survey conducted Aug. 20–Sept. 3. The measure remains above the 8.2-month reading from August 2024.
“The dip in backlog observed in August is not surprising,” said ABC Chief Economist Anirban Basu, citing ongoing declines in nonresidential construction spending and weakness in commercial and institutional work. He said heavy industry and infrastructure remain resilient, while private-sector projects are struggling with cost pressures, policy uncertainty and labor shortages.
Regions, Sectors See Uneven Performance
ABC’s Construction Backlog Indicator slipped to 8.5 months in August 2025, down from 8.8 in July but up from 8.2 a year earlier. Infrastructure and heavy industrial sectors drove gains, while small firms reported weaker pipelines.
Company size continued to drive differences: contractors with less than $30 million in annual revenue reported 7.15 months of backlog, compared with 13.5 months for firms above $100 million. ABC said backlog of the largest contractors has risen for three consecutive months and is now at its highest level in more than two years.
Regionally, the South continued to lead all regions with 10.0 months of work under contract, followed by the Midwest at 8.34 months, the Northeast at 7.97 months and the West at 6.63 months.
By market segment, commercial and institutional projects averaged 8.32 months of backlog in August, while heavy industrial stood at 11.0 months and infrastructure at 11.16 months.
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In the face of economic uncertainty, contractor sentiment showed little change. ABC’s Construction Confidence Index readings showed sales expectations at 60.4 in August, staffing at 59.9 and profit margins at 51.9, each above the threshold of 50 that signals anticipated growth.
Underlying responses indicated that 57% of contractors expect sales to rise, with 9% predicting a “big” increase, while just over one in five expect declines.
On staffing, nearly half foresee increases and 12% expect cuts. For profit margins, 35% expect gains, 44% anticipate no change and 25% foresee deterioration.
Basu noted that roughly one quarter of contractors reported a project delay or cancellation tied to tariffs, with similar shares citing financing and labor issues. Those impacts, he said, prompted caution that “how long this optimism persists” in the face of such headwinds remains uncertain.
ABC added that the 8.5-month average is roughly in line with the index’s trend since early 2023, although below the post-pandemic peak above 9 months recorded in mid-2022. The association publishes time-series data and methodology notes with each release.
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Bryan Gottlieb is the online editor at Engineering News-Record (ENR).
Gottlieb is a five-time Society of Professional Journalists Excellence in Journalism award winner with more than a decade of experience covering business, construction, and community issues. He has worked at Adweek, managed a community newsroom in Santa Monica, Calif., and reported on finance, law, and real estate for the San Diego Daily Transcript. He later served as editor-in-chief of the Detroit Metro Times and was managing editor at Roofing Contractor, where he helped shape national industry coverage.
Gottlieb covers breaking news, large-scale infrastructure projects, new products and business.
email gottliebb@enr.com | office: (248) 786-1591
