Dive Brief:
- Construction backlog increased to 8.8 months in April, a 10-month highpoint for contractors, according to Associated Builders and Contractors.
- Growth remains heavily concentrated among construction firms with more than $100 million in annual revenues, especially for those with data center contracts. All other contractor size categories have a smaller backlog than they did one year ago, according to the report.
- “While backlog surged to a 10-month high in April, the industry’s recent momentum is highly concentrated among a subset of contractors,” said Anirban Basu, ABC chief economist. “Booming data center construction has almost exclusively benefited the largest ABC members.”
Dive Insight:
Large contractors with artificial intelligence work are pulling away from the rest of the construction industry, according to the latest backlog data.
For example, 42% of contractors with more than $100 million in annual revenues are under contract to work on data center projects, compared to just 7% of contractors with less than $100 million in annual revenues.
Contractors under contract to work on data centers have about 12.2 months of backlog, according to ABC. That’s about four months longer than contractors without those jobs, said Basu.
Yet, while smaller builders are seeing a slowdown in new projects, they have remained consistently upbeat, with the outlook for sales, profit margins and staffing levels all rising over the last month, regardless of the larger macroeconomic headwinds hitting the sector. ABC’s Construction Confidence Index, which measures builders’ outlooks over the next six months, was up across the board.
“The upshot is that weak construction spending data, the recent rise in oil prices and emerging materials price escalation have not diminished ABC member confidence,” said Basu. “Just one in five expect their profit margins to shrink over the next six months, the fewest since January 2025, and contractors are similarly upbeat about their sales and staffing levels.”
