Dive Brief:
- Construction backlog bounced back from a four-year low in February, but large construction companies and data center builds accounted for a lopsided share of those wins, according to Associated Builders and Contractors.
- Backlog rose a tenth of a point in February to 8.1 months for the industry, but contractors with over $100 million in revenue reported 12.1 months of work. Meanwhile, builders with data center contracts had 11.2 months of work on their books, while those without jobs in the sector languished at 7.6 months. Industrywide, year-over-year backlog dropped by 0.2 months.
- That divide between haves and have-nots may only widen going forward. “While data center work should continue apace over the next few quarters, the conflict in Iran … may suppress demand for other forms of construction work due to elevated materials prices, borrowing costs and uncertainty,” said Anirban Basu, ABC chief economist, in a news release.
Dive Insight:
Regionally, the Middle States saw the largest gains, with backlog growing by a full month from January to February. Year over year, the region posted the only gain nationally, growing by 1.2 months. That reflects a continued recovery in the area since the pandemic.
“It’s notable that backlog growth has been confined to the Middle States region,” Basu said. “After struggling in the immediate aftermath of the pandemic, the Midwest has posted surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity.”
While the commercial and institutional and heavy industrial sectors saw month-over-month backlog increases in February, the infrastructure segment gave back its stand-out gains from January, dropping back to 8.9 months of work from its previous 10.
Despite the uneven results across sectors and regions, contractors remained largely upbeat. According to the Construction Confidence Index, which measures building pros’ outlooks for the next six months, expectations for sales and hiring increased. Although the projection for profit margin growth came in slightly lower in February than the previous month, all three indicators remained above 50, indicating expectations of growth.
“While contractors remain slightly optimistic that their profit margins will expand over the next six months, that confidence may not survive the recent and precipitous increase in oil prices,” said Basu in the release. “Rising input costs, if persistent, could weigh on hiring expectations, which were particularly upbeat in February. The CCI series for staffing level expectations rose to the highest level since March 2025.”
