Contractor Confidence Down in May But Overall Optimism Remains

by David Flaherty | 10 June 2025 4:56 pm

Associated Builders and Contractors (ABC) reported today that its Construction Backlog Indicator[1] fell to 8.4 months in May, according to an ABC member survey conducted May 20 to June 3. The reading is up 0.1 months since May 2024, but down slightly from 8.7 months in April.
While the South maintains the longest backlog of any region at 9.4 months, it was the only one to experience a decline in May, down from 10.3 months in April. Only the Northeast (8.7 months) has a longer backlog on a year-over-year basis, up 1.7 months from May 2024. However, it experienced no change from April to last month. The Middle States region (7.5 months in May, up 0.3 from April) and West (7.5 months in May, up 0.4 from April) have both seen slight backlog declines over the past year, at 0.1 months and 0.6 months, respectively.
ABC’s Construction Confidence Index reading for profit margins improved slightly in May to 53.3, while the readings for sales (62.1 to 60.4) and staffing (62.6 to 61.7) levels fell. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
“The impacts of tariffs are increasingly apparent, with nearly one in four ABC member contractors reporting tariff-related project cancellations or delays in May,” said ABC chief economist Anirban Basu. “While 87 percent of survey respondents have been notified of tariff[2]-related materials price increases, profit margin expectations actually improved in May.
“Of course, this survey was largely conducted before the announcement of the now-implemented 50 percent steel and aluminum tariffs, and margins will likely come under pressure in the coming months,” said Basu. “Despite this potential headwind, approximately six out of 10 contractors expect their sales to increase over the next two quarters, suggesting widespread optimism about the outlook.”

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