WASHINGTON — Associated Builders and Contractors reported June 10 that its Construction Backlog Indicator 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.

While the South maintains the longest backlog of any region, it was the only one to experience a decline in May. Only the Northeast has longer backlog on a year-over-year basis, while the other three regions experienced annual declines.

ABC’s Construction Confidence Index reading for profit margins improved in May, while the readings for sales and staffing 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 1 in 4 ABC member contractors reporting tariff-related project cancellations or delays in May,” said ABC Chief Economist Anirban Basu. “While 87% of survey respondents have been notified of tariff-related materials price increases, profit margin expectations actually improved in May.

“Of course, this survey was largely conducted prior to the announcement of the now-implemented 50% steel and aluminum tariffs, and margins will likely come under pressure in the coming months,” said Basu. “Despite this potential headwind, approximately 6 out of 10 contractors expect their sales to increase over the next two quarters, suggesting widespread optimism about the outlook.”