Tariffs and materials prices knock US contractors’ confidence

That’s one of the main messages from Associated Builders and Contractors (ABC), which has published its latest Construction Backlog Indicator for the month of July 2025.

The survey of ABC members, conducted between 24 July and 4 August, saw the indicator rise to 8.8 months, up 0.4 months on July 2024.

Backlog increased year on year in every region expect for the South, where the backlog remains significantly longer than in any other region.

However, there were signs that headwinds have started to affect confidence among US contractors.

The ABC’s Construction Confidence Index recorded a decline in confidence when it comes to both sales and profit margins in July 2025. The index recorded a score of 60.4 for the month on sales (down from 62.8 in June 2025), and 51.8 on profit margins (down from 53.5 in June 2025). Both scores remain above the threshold of 50, which indicates no change.

Image: Associated Builders and Contractors, Construction Backlog Indicator, Construction Confidence Index

Companies also saw an increase in confidence when it comes to staffing, with the score rising to 62.4 in July 2025, up from 59.4 in June.

ABC chief economist Anirban Basu said, “Backlog continued to rise in July despite the ongoing decline in construction spending. Some of that strength can be attributed to the fact that one in every eight ABC members is currently under contract to perform work on a data centre project. Backlog in the infrastructure category has also increased considerably over the past year, and public construction activity has outperformed the private sector over the past several months.”

But he added, “While backlog rose, contractor confidence slipped in July, especially with regards to profit margins. Fewer than 2% of ABC members expect their profit margins to increase significantly over the next six months, the fewest since October 2024. This is likely due to trade policy and the recent acceleration in materials price escalation; more than 80% of ABC members have been notified of tariff-related price increases.”