The Associated Builders and Contractors (ABC) has reported that its Construction Backlog Indicator (CBI) has increased to 9.2 months in November, the highest level since the second quarter of 2019. 

This reading is 0.4 months up from October and a 0.8-month increase from November 2021. ABC’s CBI measures the amount of work that will be performed by commercial and industrial contractors in the months ahead. November’s rise is attributed to contractors with under $30 million in revenue, which saw a 0.6-month change from October. 

The commercial and institutional categories and healthcare-related construction were the main drivers of the backlog improvement. 

“The rise in backlog is remarkable and unexpected,” said ABC Chief Economist Anirban Basu. “A number of contractors have been reporting that their backlog has risen rapidly over the past three months, which is counterintuitive given the pervasive view that the broader economy is headed into recession.”

“While it seems unlikely that backlog will hold up in the face of the Federal Reserve’s efforts to slow demand, many predicted that backlog would have dipped by now and that has yet to transpire. What’s more, many contractors expect sales and staffing levels to climb over the next six months, while profit margins are projected to remain stable,” he added.

According to the report, ABC’s Construction Confidence Index reading for profit margins and staffing also increased in November, while the reading for sales decreased. The three readings remained above the threshold of 50, which indicates the potential for growth over the next six months.