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Dive Brief:

• Construction backlog increased to 8.6 months in March, continuing a positive turnaround after hitting a 4-year low in January, according to Associated Builders and Contractors.
• Backlog increased 0.5 months from February and ticked up 0.1 months year over year, according to the report. Contractors with data center contracts, 15% of those surveyed, outperformed once again, holding 10.6 months of backlog compared to 8.3 months for the 85% without those projects.
• Despite the backlog increase, future performance and contractor confidence around it “depends on how quickly the conflict in Iran resolves,” said Anirban Basu, ABC chief economist. “A lengthy dispute will put continued upward pressure on oil prices and borrowing costs.”

Dive Insight:

The latest backlog data suggests contractors have regained footing after January’s shaky start to the year. 

The infrastructure segment added 1.2 months to backlog over the past month, followed by a 0.5 month uptick in the commercial and institutional categories. Only heavy industrial bookings fell during that span, according to ABC.

“Backlog has fully rebounded from January’s four-year low and, at 8.6 months, is now back to levels not seen since last summer,” said Basu. “Contractors appear unphased by the sharp rise in oil prices precipitated by the conflict in Iran.”

Profit margins expectations improved to the highest level since February 2025, added Basu. Staffing expectations amongst contractors also posted strong growth over the past month.

“Staffing expectations, up in each of the past four months, are now at the highest level since April 2022,” said Basu. “This increase is particularly surprising given that the industry’s hiring rate fell to the lowest level ever recorded in February, although it aligns neatly with the uptick in employment growth observed in the March jobs report.”