Construction Backlog Indicator

Construction Industry Investment Declines, Hiring Slows Due to Talent Scarcity


For 10 of the past 12 calendar quarters, investment in nonresidential construction has declined.

According to an analysis released in early November by the Associated Builders and Contractors, investment in nonresidential structures fell at an annual rate of 15.3 percent in the third quarter of 2022. ABC Chief Economist Anirban Basu says it’s the steepest decline since Q2 2020.

Investment in residential projects nationwide declined by a whopping 26.4 percent over the same time period.

Despite this decrease in investment, contractors building commercial and industrial projects expect their sales to rise over the next six months, according to the ABC’s Construction Confidence Index.

The association’s Construction Backlog Indicator – an index that reflects the amount of nonresidential construction work expected to be performed in the months ahead – shows that U.S. commercial and industrial contractors’ work backlog today averages nine months, 1.4 months longer than a year ago. Contractors attribute increased backlog to a hefty increase in heavy industrial projects, including a 21.5 percent increase in manufacturing-related construction spending.

As far as construction talent is concerned, the Associated General Contractors of America reports that last month the industry added only 1,000 employees nationwide. The industry continues boosting wages for hourly workers as firms battle to locate and hire qualified workers from a still-shrunken labor pool.

Hourly earnings rose from $33.41 in October 2021 to $35.27 in October 2022.