Dive Brief:
- Construction backlog rebounded to 8.7 months in June due to a strong flow of data center projects, according to an Associated Builders and Contractors survey conducted June 20 to July 7.
- The largest contractors now report backlogs nearly two months longer than a year ago, while mid-sized firms with $30 million to $100 million in annual revenue posted a year-over-year decline.
- “Despite a wide array of headwinds and disappointing construction spending data in recent months, backlog rebounded,” said Anirban Basu, ABC chief economist. “The durability of contractor backlog is partially due to the ongoing boom in data center construction.”
Dive Insight:
Contractor confidence held steady in June despite continued disruptions from tariffs.
Many builders remain cautious as material price volatility and trade policy negotiations cloud their ability to plan ahead. Provisions from the One Big Beautiful Bill Act, which expand tax incentives and boost equipment access, will likely fuel construction momentum, but contractors still face growing pressure on margins.
For example, Basu emphasized one in five contractors experienced a tariff-related delay or pause in June. He added that new trade policy changes could further squeeze margins going forward.
“Notably, this survey predates the most recent trade policy announcements,” said Basu. “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.”
Nevertheless, sales and profit margin confidence improved in June. Three in five contractors now expect revenue to increase in the second half of 2025, according to the report. Only expectations around staffing dipped in the most recent survey, according to ABC.
The ongoing data center construction boom has helped offset some of that pressure. One in seven ABC members now holds an active contract in the sector, according to the report.
That pace shows few signs of slowing. Contractors on the ground say early-stage data center demand remains highly elevated in both primary hubs and emerging markets.
