Dive Brief:
- Construction backlog gains faded in October largely due to worsening prospects for builders not under contract to work on data centers, according to a Tuesday release from Associated Builders and Contractors.
- Total backlog fell month over month to 8.1 months in October, down 0.6 months from September and 0.3 months from a year earlier, according to the survey conducted Oct. 20 to Nov. 3.
- Contractors’ sales and staffing expectations weakened as well, though outlook on profit margins improved over the month, according to the ABC report.
Dive Insight:
Bookings for most major construction types slipped in October, said Anirban Basu, ABC chief economist, in the release.
Backlog for commercial and institutional projects dropped one month in October to 8 months, according to the report. Infrastructure backlog also ticked down from 9.4 months in September to 8.7 in October, the lowest level since May 2025, according to the report.
“Backlog fell sharply in October, returning to levels not consistently observed since last winter,” said Basu. “This decline was largely due to worsening prospects for the 88% of contractors not under contract to work on data centers.”
Contractors with data center work increased their backlog from 11.3 months in September to 11.5 months in October, said Basu. A majority of those firms have more than $100 million in annual revenue.
Firms outside the data center buildout saw their backlog fall from 8.3 months in September to 7.6 months in October, he added. The difference in backlog between these two types of contractors reached nearly four months in October, up from three months in September.
“Despite the decline in backlog and worsening sales and staffing expectations, contractor optimism regarding profit margins improved in October,” said Basu. “This is encouraging given recent increases in materials prices and borrowing costs, although it should be noted that roughly 1 in 4 contractors still expect their margins to shrink over the next six months.”
