Associated Builders and Contractors reported that its Construction Backlog Indicator rose to 8.8 months in July, according to an ABC member survey conducted July 24 to Aug. 4. The reading is up 0.4 months since July 2024. 

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog is up on a year-over-year basis in every region except for the South. Despite the lack of growth, backlog in the South remains significantly longer than in any other region.

ABC’s Construction Confidence Index reading for sales and profit margins declined in July, while the reading for staffing levels rose to the highest level since April. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Backlog continued to rise in July despite the ongoing decline in construction spending,” said ABC Chief Economist Anirban Basu. “Some of that strength can be attributed to the fact that 1 in every 8 ABC members is currently under contract to perform work on a data center 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.

“While backlog rose, contractor confidence slipped in July, especially with regards to profit margins,” said Basu. “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.”

By Luiza Mills, Interstate Electrical Services Corporation

There is still time to enjoy the fleeting summer but before we know it, back to school will soon be upon us. The start of a new school year always brings excitement, new opportunities and continued realization that the construction industry offers competitive family-sustaining wages without the need for long-term debt that is so often associated with a college degree. With that in mind, we are happy to report that in July, our Chapter awarded 10 “Building Our Future Scholarships” to worthy apprentices who attend the Gould Construction Institute (GCI).

In September, GCI will commence the school year in its new state-of-the-art Billerica training facility. Between our outreach about the vast opportunities available in the trades and continuing labor shortages, Gould enrollment has been booming. 

With that in mind, I’d like to take a moment to highlight Paul O’Loughlin, a long-time ABC MA member and prior GCI board chair.  Paul has retired from his business but that hasn’t dulled his devotion to our industry or our Chapter.  He now works as a Gould sheet metal teacher, passing along his expertise to a new generation of construction professionals.

“My days as a sheet metal worker are behind me, but my commitment to the trade is not,” Paul said.  “There are few things more rewarding than working with the young people who will be the future leaders of our industry.”

It continues to be a challenge to fill these teaching positions. If you or someone you know might be interested in becoming a teacher, now would be a great time to act on it.  All you need is a passion for your trade, a current license and a desire to mentor the future leaders of our industry and our Chapter.  If you have those things, GCI will help you with the rest! Please consider reaching out to GCI Instructor Liaison Mike Maloney at [email protected].  Your knowledge is needed to train our future industry innovators and leaders. I think you’ll be glad you did.  

The construction industry had 246,000 job openings on the last day of June, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 14,000 last month but are down by 39,000 from the same time last year.

“While industrywide job openings increased in June, the share of all construction positions that are unfilled remains low by recent standards,” said ABC Chief Economist Anirban Basu. “More importantly, the hiring rate during the first half of 2025 was lower than during the first six months of any year since the start of the data series in 2000. Because contractors have also been laying workers off at a historically slow pace, industrywide employment continues to edge higher, but few job openings and sluggish hiring suggest weak demand for labor.

“That said, these data likely reflect the fact that the residential segment has struggled mightily this year, while nonresidential employment data have been more upbeat,” said Basu. “Fewer than 14% of ABC members expect their staffing levels to decrease during the second half of 2025, according to ABC’s Construction Confidence Index. This suggests that the nonresidential side of the industry will continue to add jobs during the third and fourth quarter of 2025.”

The national June 2025 not seasonally adjusted construction unemployment rate was 3.4%, a 0.1% increase from June 2024, according to by Associated Builders and Contractors’ state-by-state analysis of U.S. Bureau of Labor Statistics data. The analysis found that 18 states had lower estimated construction unemployment rates over the same period, 28 had higher rates and four states had the same rates. All of the states had construction unemployment rates below 10%.

Massachusetts’ 4.8% construction unemployment rate was up from 4% in June 2024.

National NSA payroll construction employment was 114,000 higher than June 2024. As of June 2025, seasonally adjusted payroll construction employment was 8.3 million, or 9.4%, above its pre-pandemic peak of 7.6 million.

Estimated state construction unemployment rates were lower than their pre-pandemic level in three-quarters of states. As of June 2025, 37 states had lower construction unemployment rates compared to June 2019 while 12 states had higher rates, and one state (Kansas) had the same rate.

“While June state construction unemployment rates continue to indicate a relatively healthy level of construction employment, uneasiness that the economy might weaken over the remainder of this year and into 2026 is producing some hesitancy among builders and developers about proceeding with new projects,” said Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC.

“The impact of tariffs on building materials is already showing up in some prices. Meanwhile, uncertainty surrounding the level of tariffs on building materials going forward and how long they will be in place hangs over the industry. Further, the industry continues to face elevated interest rates and higher labor costs. Although most builders are loath to lay off workers at present, they are more cautious in their hiring.”

Recent Month-to-Month Fluctuations

In June, the national NSA construction unemployment rate declined 0.1% from May. Among the states, 29 had lower rates, 19 higher rates and two states (Arkansas and Kentucky) had the same estimated construction unemployment rates as in May.

The Top States

The five states with the lowest estimated NSA construction unemployment rates for June were:

1. South Dakota, 0.8%
2. North Dakota, 1.2%
3. New Hampshire, 1.3%
4. Montana and Oklahoma (tie), 1.5%

South Dakota, North Dakota, Montana and Oklahoma each posted their lowest June NSA estimated construction unemployment rate on record. New Hampshire had its third-lowest June rate on record. This was the third time that North Dakota’s June unemployment rate fell to 1.2%, its lowest June rate on record, matching that month’s rate for 2015 and 2022. South Dakota had the largest year-over-year drop in its rate among the states, down 1.7%. Montana followed with the second biggest decrease, down 1.5% (tied with Illinois).

The Bottom States

The five states with the highest June estimated NSA construction unemployment rates were:

46. Maryland, 4.6%
47. New Mexico, 4.8%
48. Connecticut, 5.2%
49. New Jersey, 8.5%
50. Rhode Island, 8.9%

New Mexico recorded its second lowest June rate on record, behind June 2022’s 3.7% rate. Rhode Island had the largest decrease in its monthly NSA estimated construction unemployment rate among the states, down 1.9%.

E.J. Callahan & Associates LLC

By Jeffrey T. Rogers, CPA, MST | Partner, E.J. Callahan & Associates

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law. The package contains an estimated $12.5 trillion in tax provisions that will impact both businesses and individuals. The provisions of the bill largely fell into one of four categories:

• Addressing provisions of the Tax Cuts and Jobs Act (“TCJA”) that were due to expire
• “Fixing” provisions put in place to pay for the TCJA that were largely detrimental to taxpayers
• Fulfilling promises made along the presidential campaign trail
• Introducing tax measures to pay for the OBBBA tax benefits

 

TCJA: Expiring/Returning Provisions

The TCJA was enacted in 2017 during Trump’s first term in office. Due to its passage through a budgetary process called “reconciliation”, many of the provisions in the bill were required to have an expiration date which, in nearly all cases, was set to be December 31, 2025. Without Congressional action tax law would effectively return to its pre-TCJA form at the end of the year which would mean expiration and adjustment of many popular tax breaks.  

Below is a look at how the OBBBA addressed this situation.
 

Individual Income Tax Rates:

The TCJA introduced seven inflation-adjusted tax brackets that were set to return to their pre-2018 ranges. The OBBBA has made these tax rates permanent with continued inflation indexing post-2025. 
 

Standard Deduction:

The TCJA approximately doubled the standard deduction that all taxpayers are able to utilize to reduce their taxable income. Doing so minimized the need to itemize deductions which, in general, aided lower income taxpayers. The OBBBA permanently extended the standard deduction and, for 2025 set them at $15,750 for individuals and $31,500 for married filed joint filers.

Perhaps recognizing that a higher standard deduction could lower incentive to donate to charity, the OBBBA enacted a provision allowing taxpayers who do not itemize to deduct up to $1,000 in contributions, $2,000 if married filing jointly.
 

Child Tax Credit:

Prior to the TCJA, the credit was equal to $1,000 per child with many taxpayers unable to benefit due to a low income phase-out threshold. The TCJA doubled the credit (to $2,000) and increased the phaseout threshold to $200,000 individual and $400,000 joint. The OBBBA made the higher phaseout thresholds permanent while increasing the per child credit to $2,200 with future adjustments for inflation.
 

Estate and Gift tax exemption: 

The estate and gift tax exemption determines how much of a decedent’s estate will be taxed before passing to non-spouse beneficiaries. The TCJA doubled the exemption levels with annual inflation adjustments allowing it to reach $13.61 million for both spouses in 2024. The OBBBA increased the exemption to $15 million and made the higher levels permanent.
 

Section 199A Pass-Through Entity Qualified Business Income Deduction:

Business owners may remember that reducing the corporate tax rate from 35% to 21% was the primary focus of the TCJA. This deduction, set at 20% of qualified income, was put into effect to level the playing field between corporations and pass-through entities, which are taxed at individual tax rates. While the corporate rate had been made permanent, the Section 199A deduction was due to expire, which would have been devastating to small and mid-size businesses. The OBBBA made the deduction permanent. At one point there was a proposal to increase the deduction rate to 23% but that ultimately did not come to fruition, and it will remain at its current 20% into the future.

Not everything related to the expiring TJCJA provisions was welcome news. Had the enacted law run its course and pre-TCJA provisions returned, taxpayers would have seen the return of the personal exemption deduction and had the ability to deduct moving expenses, miscellaneous itemized deductions, and a larger portion of their home mortgage and home equity indebtedness.
 

Provision Fixes

When the TCJA was enacted, there were tax provisions put in place that would offset or pay for some of the tax benefits. To various degrees, all of these had negative effects on taxpayers and, as a result, a goal of the OBBBA was to alleviate some of the burden that had been created.
 

Fixed Asset Depreciation Expensing: 

As part of the TCJA, businesses were permitted to write off the full cost of qualified capital assets in the year placed in service under a provision called “Bonus depreciation”. Prior to the TCJA, the bonus depreciation rate was set at 50%. The ability to write off 100% in the first year was only effective through 2022. Beginning in 2023, the first year write off was capped at 80% of the cost with every subsequent year seeing an additional 20% reduction until phased out in 2027.

The OBBBA restored bonus depreciation for qualified property placed in service after January 19, 2025. 

In addition, with its increase to $2.5 million, the OBBBA effectively doubled the first-year expensing allowed by Section 179, which is similar in concept to bonus depreciation but with more federal limitations. The OBBBA loosened one of the limitations in that companies can take full benefit of Section 179 if eligible asset acquisitions did not exceed $4 million for the year.
 

Return to Section 163(j) Business interest expense limitation to EBITDA:

One of the objectives of the TCJA was for businesses to reduce their reliance on debt to fund operations. In an attempt to accomplish this, unless limited exceptions applied or certain elections were made, section 163(j) of the Internal Revenue Code was expanded to require most company’s interest expense deduction to be limited to 30% of their adjusted taxable income. Any excess interest expense could be carried forward to a future tax year and used when the company had “excess business income”. Many companies were able to avoid a deduction limitation through 2021 as the adjusted taxable income figure was determined prior to a reduction for tax depreciation and amortization expense. However, the calculation changed in 2022, as scheduled by the TCJA, such that the adjusted taxable income threshold became post-depreciation and amortization expense. This change, coupled with rising interest rates, resulted in significantly more suspended interest expense across businesses. While the OBBBA did not repeal the Section 163(j) limitation, it did return to its pre-2022 calculation, which was based on EBITDA.

 

Repeal of the Section 174 requirement to amortize Domestic R & E expenditures:

Historically, Section 174 of the Internal Revenue Code had permitted an immediate deduction of research & experimentation expenses. However, as part of the TCJA, Section 174 was amended and, beginning in 2022, the ability to deduct was changed to a requirement to capitalize and amortize domestic research & experimentation expenses over 5 years (15 years for international R&E expenses). The capitalization requirement went into effect regardless of whether a company claimed the Section 41 Research & Development tax credit and led to several small and mid-sized businesses having significantly higher tax bills in 2022-2024 than they had seen previously. 

While foreign R&E is still required to be amortized over 15 years, the OBBBA will allow full expensing to return for domestic R&E beginning in 2025. Eligible small businesses will be able to amend their 2022-2024 returns to recover their unamortized R&E expenses and larger businesses may opt to deduct their remaining costs in 2025 and/or 2026
 

Repeal of State and Local Tax (SALT) Cap Limitation:

Prior to the TCJA, individual taxpayers were generally able to deduct the full amount that they paid for state income taxes, real estate taxes and certain personal property taxes as an itemized deductions on the personal tax returns. The TCJA placed a $10,000 cap on the amount able to be deducted.

While those in high taxing jurisdictions had hoped for an outright repeal, that did not come to pass. However, the OBBBA did increase the cap to $40,000 in 2025 with annual 1% increases through 2029 before returning to $10,000 in 2030. The deduction would be subject to phasedown beginning with modified adjusted gross income of $500,000 but would not be reduced below $10,000.

On a related note, there had been some concern that the Pass-through entity tax (PTET) workaround that many states had administered over the last 3-4 years would be adversely impacted by this SALT cap increase. An earlier version of the OBBBA was calling for the pass-through entity taxes to be included among the $40,000. However, that potential restriction did not make it into the final bill.
 

Campaign Trail Promises

While campaigning for office prior to the election, Trump raised several tax-related ideas that didn’t have historical precedence in the tax code. The most notable were:
 

No tax on tip income:

The OBBBA introduced a deduction that would be available through 2028 for up to $25,000 of qualified tips received from working in certain customarily tipped industries. The tips must be reported in income and may be subject to state or payroll taxes but may be deducted federally - even by non-itemizers. The deduction will begin to phase out for individuals who make $150,000 and would be completely phased out if making more than $160,000.
 

No tax on overtime:

Very similar to the “no tax on tip income”, the no tax of overtime will provide a $12,500 deduction to single taxpayers and $25,000 to married taxpayers. Overtime compensation is defined as the amount paid in excess of an employee’s regular rate and only that portion would be deductible. This phaseout range for an individual is $150,000-$275,000 of income.

No tax on social security benefits:

While the original intention was to eliminate tax on social security benefits, this is also taking the form of a deduction. Regardless of whether social security benefits are received, all seniors aged 65 or over will be entitled to a $6,000 deduction. This is over and above the $1,600 deduction that a senior aged 65 or older may add to their standard deduction. There is a phaseout at higher earning levels.
 

Deduction for car loan interest:

Intended to encourage the purchase of vehicles assembled in the US, taxpayers with income under $100,000 ($200,000 if married filing jointly) may deduct up to $10,000 in interest on loans secured by the vehicle through 2028.
 

Bonus Depreciation for Qualified Production Property:

A central theme in Trump’s platform was to bring manufacturing jobs back to the US. To aid in that endeavor, bonus depreciation will be allowed on the manufacturing property costs where production begins after January 19, 2025 and before 2029. The manufacturing property must be placed in service before 2031.
 

Introducing tax measures to pay for the OBBBA tax benefits

Clean Energy Incentives:

Many of the clean energy credits and deductions that were introduced or expanded as part of the Inflation Reduction Act will see an acceleration of their termination dates. Credits for Energy Efficient Home Improvement, Residential Clean Energy, New, Previously Owned, and Commercial Clean Vehicles will not be available for 2026 purchases and, in some cases, sooner.

The Section 179D, Energy Efficient Commercial Buildings Deduction and Section 45L New Energy Efficient Home Credit have slightly longer shelf lives running through June 30, 2026.

Credits for wind and solar facilities placed in service after 2027 will not be available.

Limitation of Charitable Contribution Deductibility:

Corporations have always been limited by a ceiling equal to 10% of taxable income; now there will be a 1% floor as well. Individual taxpayers who itemize will have a floor of their own equal to .5% of their adjusted gross income.

Limitation on Deductibility of Gambling Losses:

Prior to the passing of the OBBBA, taxpayers with gambling winnings could fully offset those earnings with the gambling losses that they incurred. Now gambling losses may only shelter 90% of the gambling earnings.

Excess Business Loss Limitations:

Originally enacted as part of the Tax Cuts and Jobs Act, this loss limitation under Sec. 461(l) has the effect of limiting the amount of business loss that can be deducted in a given year. Such losses get converted to Net Operating Losses and become available for use in future years subject to NOL limitations. Set to expire at the end of 2028, the OBBBA made this loss limitation permanent.

Termination of Employee Retention Credit (ERC) program:

The ERC program had already reached its end date for new claims as a result of the 3-year statute of limitation. However, now the OBBBA has announced that any claims submitted after January 31, 2024, which would have been timely, will not be considered either.

Other Notable Tax Provisions

The OBBBA contained additional tax provisions that didn’t fit into one of the above four categories but were important, nonetheless. Opportunity Zones, New Market Tax Credits, and International tax rates were all addressed in the bill. The payment threshold for Form 1099 reporting more than tripled to $2,000 and Section 1202, Qualified Small Business Stock, saw significant enhancement that will definitely need to be taken into consideration when evaluating choice of entity.

One thing is clear: there are many aspects of this bill that could warrant discussion with a qualified professional.  Should you have questions with anything contained within the OBBBA bill and how it may impact your personal or business tax situation, feel free to reach out to an EJC partner.

Associated Builders and Contractors reported that its Construction Backlog Indicator rose to 8.7 months in June, according to an ABC member survey conducted June 20 to July 7. The reading is up 0.3 months since June 2024.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

The largest contractors have nearly two months longer backlog than they did one year ago. While the smallest contractors have slightly longer backlog on a year-ago basis, backlog has fallen for contractors with $30-$100 million in annual revenues.

ABC’s Construction Confidence Index reading for sales and profit margins improved in May, while the reading for staffing levels fell. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Despite a wide array of headwinds and disappointing construction spending data in recent months, backlog rebounded to 8.7 months in June, the same level as in April,” said ABC Chief Economist Anirban Basu. “The durability of contractor backlog is partially due to the ongoing boom in data center construction; 1 in 7 ABC members is currently under contract to perform work on a data center.

“In addition to longer backlog, contractors remain broadly optimistic, with 3 in 5 contractors expecting their sales to rise during the second half of 2025,” said Basu. “Notably, this survey predates the most recent trade policy announcements, and 1 in 5 contractors had a project interrupted or paused due to tariffs in June. With some of the newest import taxes putting upward pressure on construction input prices, profit margin expectations may face pressure in the months to come.” 

Construction input prices increased 0.2% in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices increased 0.3% for the month.

Overall construction input prices are 2.1% higher than a year ago, while nonresidential construction input prices are 2.5% higher. Prices increased in 2 of the 3 energy categories last month. Natural gas and unprocessed energy materials prices were up 5.9% and 1.4%, respectively, while crude petroleum prices decreased 0.1% in June.

“Nonresidential input price escalation has accelerated in 2025, with prices rising at a rapid 6.0% annualized rate through the first half of the year,” said ABC Chief Economist Anirban Basu. “Despite this acceleration, prices for many of the inputs most directly affected by tariffs, like iron and steel, declined in June. While it is unclear how and when trade policy will affect construction materials prices, the impact was evident in June’s Consumer Price Index release; prices for core goods excluding automobiles rose at the fastest pace since late 2021.

“Economic uncertainty remains extraordinarily elevated,” said Basu. “What is all but certain is that the Federal Reserve will not be cutting interest rates at its July meeting. Despite higher-for-longer interest rates and rising input prices, contractors remain relatively optimistic about their profit margins, according to ABC’s Construction Confidence Index. This could be due to 100% bonus depreciation—made permanent in the One Big Beautiful Bill—offsetting higher operating costs.”

By Luiza Mills, Interstate Electrical Services Corporation

Late last month, the Gould Construction Institute (GCI) held its annual Student Appreciation Night and honored graduating apprentices.  It’s a great event where students celebrate the hard work they put in to reach a career milestone, with our entire community on hand to join them while enjoying raffles, giveaways, good food and refreshments as they complete another year of their education.

It's important to highlight the presence of so many GCI teachers, who come out in force to support the students.  Amid an industry-wide labor shortage and while we continue to work hard at opening opportunities for those wanting to enter the trades, it’s our teachers who tirelessly devote themselves to ensuring a channel of qualified talent for ABC MA member companies.

The other thing that made the evening special was that it was the first time we could hold this celebration at our own state-of-the-art training facility.  After years of hard work, GCI has its own place where students can learn and get the hands-on training they need to prepare them for careers in the construction industry.

Next year, when we celebrate a new class of graduates at GCI, we hope you’ll join us to meet these talented and qualified apprentices, enjoy great food, networking, tour our state-of-the-art training facility and say thank you to our educators who are helping to develop the craftspeople our companies need to thrive.  

The construction industry added 15,000 jobs on net in June, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has increased by 121,000 jobs, or 1.5%. 

Nonresidential construction employment expanded by 9,200 positions on net, with growth registered in just 1 of 3 major subcategories. Nonresidential specialty trade added 12,400 jobs, while heavy and civil engineering and nonresidential building lost 2,800 and 400 jobs, respectively.

The construction unemployment rate fell to 3.4% last month. Unemployment across all industries declined from 4.2% in May to 4.1% in June.

“Virtually every economist has been waiting for indications of stagflation,” said ABC Chief Economist Anirban Basu. “The wait continues. June’s employment report, coupled with recent inflation data, indicate that the U.S. economy continues to demonstrate solid momentum, stable unemployment and declining inflation. Construction added jobs for a second consecutive month.

“While many will cheer this jobs report, some construction firm leaders may not be among that group,” said Basu. “While abating fears of recession are comforting, these data effectively slammed the door shut on a July Federal Reserve interest rate cut. A growing fraction of contractors is experiencing weakness in backlog as projects are postponed in an uncertain economic environment coupled with stubbornly elevated borrowing costs.

“At the same time, construction materials prices have begun to edge higher, in part because of substantial tariffs on steel, aluminum, Canada, Mexico and China,” said Basu. “All things equal, that will drive up construction delivery costs, render more projects uneconomical and diminish contractor margins. Shifting immigration policy stands to reinforce these dynamics. Close attention should be paid to the profit margins component of ABC’s Construction Confidence Index in the coming months, which should reflect how these higher costs are affecting contractor operations.”

Construction input prices increased 0.2% in May compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices increased 0.3% for the month.

Overall construction input prices are 1.3% higher than a year ago, while nonresidential construction input prices are 1.6% higher. Prices decreased in 2 of the 3 energy categories last month. Natural gas prices were down 18.7%, while prices for unprocessed energy materials were down 3.5%. Crude petroleum prices increased 1.3% in May.

“Construction materials prices continued to increase at a faster-than-ideal pace in May,” said ABC Chief Economist Anirban Basu. “While input prices are up just 1.3% over the past year, that modest escalation is entirely due to price decreases during the second half of 2024. Costs have increased rapidly since the start of this year, with input prices rising at a 6% annualized rate through the first five months of 2025.

“Accelerating input price escalation is largely due to rapid price increases for tariff-affected goods like iron and steel,” said Basu. “Expect this dynamic to remain over the next few quarters; these data predate tariffs on iron and steel rising from 25% to 50%, which went into effect on June 4. Despite rising input prices, contractors remain relatively optimistic about their profit margins, according to ABC’s Construction Confidence Index. With cooler-than-expected economywide inflation in May, the number of expected rate cuts in 2025 has risen. If those expectations are realized, it would provide the construction industry with a much-needed tailwind.”