Dive Brief:

• Construction backlog fell to 8 months in January, down 0.2 months from December and now sits at its lowest level in four years, according to an Associated Builders and Contractors survey conducted Jan. 20 to Feb. 3.
• Reinforcing a recent theme in the industry, however, that slump was not felt equally by all builders. Larger contractors with over $50 million in annual revenues saw year-over-year backlog gains, while those below that threshold had fewer pending jobs on their books compared to the same point in 2025.
• Infrastructure backlog ticked up month over month in January to 10 months, nearly a one month gain from December. Other categories, including commercial and institutional, fell. Year over year, total backlog dropped 0.4 months in January for the industry as a whole.

Dive Insight:

The unfavorable backlog report to start the year stood in stark contrast to contractors’ sentiments for their own businesses, however, noted Anirban Basu, ABC chief economist.

“Backlog fell to a four-year low in January, yet contractors remain shockingly sanguine about the near-term outlook,” said Basu. “Just 13% of contractors expect their sales to decrease over the next six months, the smallest share since February 2022.”

At the same time, despite a sunny outlook for their own businesses, ABC members appear far less optimistic about their peers’ positioning. About 46% of contractors expect other contractors will see their sales decline over the next two quarters, according to the report. 

“Whether or not this personal optimism is justified will likely depend on the extent to which borrowing costs can decline in 2026,” said Basu.

ABC’s Construction Confidence Index reading for sales, profit margins and staffing all jumped to kick off 2026, according to the report. Sales expectations, specifically, posted higher readings than a year ago. Profit margins and staffing levels also indicate growth expectations over the next six months, but are slightly worse than a year ago.