Dive Brief:
- Construction backlog fell sharply month over month in July to its lowest level since January, according to a Tuesday release from the Associated Builders and Contractors.
- Contractors reported eight months of work on their books in July, down 0.8 months from both June and the same period a year ago, according to the report.
- “The data center boom masks the depth of this weakness,” said Anirban Basu, ABC chief economist, in the release. “There is a lack of momentum in any other segment.”
Dive Insight:
The backlog report highlights the growing divide between contractors with data center work and those without it, according to ABC.
The 12% of ABC contractors with data center projects under contract reported a much stronger level of backlog in July, at 11.4 months, said Basu. The other 88% of ABC contractors without those builds reported 7.5 months, he said.
“This dynamic has been particularly difficult for small and mid-size contractors,” said Basu in the release. “Backlog in the $30-$50 million annual revenue category, for instance, fell to the lowest level since March 2020.”
Larger contractors continue to hold substantially more work than smaller firms, according to the data. Firms with more than $100 million in annual revenue, for example, reported 12.1 months of backlog in July, compared with seven months for contractors with less than $30 million in revenue, according to ABC.
Infrastructure backlog posted the largest month over month decline among sectors, down 1.3 months to 8.8 months. Backlog for commercial and institutional projects, on the other hand, ticked down 0.9 months over the same period, according to the report.
