Construction Backlog Falls as Contractor Profit Outlook Weakens

ABC’s backlog measure fell to 8.8 months, while confidence in sales and staffing improved and profit expectations weakened

chart — Associated Builders and Contractors

Associated Builders and Contractors’ Construction Backlog Indicator fell to 8.8 months in June, a 0.3-month decline from May, according to an ABC member survey conducted June 22 through July 8.

Despite the monthly decrease, backlog remained 0.1 months higher than in June 2025 and above every monthly reading recorded between September 2023 and April 2026.

Only the Middle States region experienced monthly backlog growth in June. Backlog declined sharply in the Northeast and is now more than one month lower than it was a year earlier.

“While backlog declined in June, it’s still longer than any point from September 2023 to April 2026,” ABC Chief Economist Anirban Basu said. “This strength is the result of continued booming data center construction.”

The results also highlight a widening divide between contractors with data center work and those without it. The 13% of surveyed ABC members working under data center contracts reported an average backlog of 11 months, compared with 8.5 months for contractors without such work.

Access to those projects varied substantially by company size. Only 8% of contractors with less than $100 million in annual revenue reported having data center work under contract, compared with 41% of contractors generating more than $100 million annually.

Basu said the disparity represents a headwind for smaller contractors that have had less opportunity to participate in the rapidly expanding data center market.

ABC’s Construction Confidence Index readings for sales and staffing increased in June, while confidence in profit margins declined slightly. All three measures remained above 50, indicating that contractors expect sales, employment and profit margins to grow during the next six months.

“The effect of rising input prices may be weighing on contractor profitability,” Basu said. “Contractor confidence regarding profit margins fell to a seven-month low in June, though expectations remain above the prevailing level from the second half of 2025.”