Builder Backlog Hits 8.8 Months Despite Challenges

Associated Builders and Contractors survey shows year-over-year growth driven by data center and infrastructure projects

ABC-Combo_graph_8.11.25-780-x-439.jpg — ABC

Photo courtesy of ABC

Associated Builders and Contractors reported that its Construction Backlog Indicator rose to 8.8 months in July, according to an ABC member survey conducted July 24 to Aug. 4. The reading is up 0.4 months since July 2024, indicating continued strength in the construction pipeline despite ongoing industry challenges.

Backlog increased on a year-over-year basis in every region except for the South. Despite the lack of growth, backlog in the South remains significantly longer than in any other region, maintaining its position as the strongest market for contractors nationwide.

ABC's Construction Confidence Index reading for sales and profit margins declined in July, while the reading for staffing levels rose to the highest level since April. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

"Backlog continued to rise in July despite the ongoing decline in construction spending," said ABC Chief Economist Anirban Basu. "Some of that strength can be attributed to the fact that 1 in every 8 ABC members is currently under contract to perform work on a data center project. Backlog in the infrastructure category has also increased considerably over the past year, and public construction activity has outperformed the private sector over the past several months."

The growth in backlog comes amid mixed signals for the construction industry. While contractors maintain work pipelines extending nearly nine months, concerns about profitability are mounting due to external economic pressures.

"While backlog rose, contractor confidence slipped in July, especially with regards to profit margins," Basu said. "Fewer than two percent of ABC members expect their profit margins to increase significantly over the next six months, the fewest since October 2024. This is likely due to trade policy and the recent acceleration in materials price escalation; more than 80 percent of ABC members have been notified of tariff-related price increases."

The survey data reflects the complex dynamics facing the construction industry, where strong demand for certain project types—particularly data centers and infrastructure—continues to drive backlog growth even as contractors grapple with rising material costs and margin pressures.

The Construction Backlog Indicator quantifies the previous month's work under contract based on the latest financials available, while the Construction Confidence Index measures contractors' outlook for the next six months. The data provides industry stakeholders with key insights into market conditions and future trends.

This article was originally posted on www.wconline.com.