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Dive brief:
- Construction delay he recovered from about four years low in February, but large construction companies and data center builds represented an uneven share of those wins, according to Associated Builders and Contractors.
- The backlog of work rose a tenth of a point in February to 8.1 months for the industry, but contractors with more than $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 not working in the sector languished at 7.6 months. Across the sector, the year-on-year service portfolio decreased by 0.2 months.
- This divide between the haves and the have-nots can only widen in the future. “While data center work should continue apace in the coming quarters, the conflict in Iran may suppress demand for other forms of construction work due to high material prices, borrowing costs and uncertainty,” Anirban Basu, ABC’s chief economist, said in a press release.
Diving knowledge:
Regionally, the Middle States saw the biggest gains, with the backlog growing a full month from January to February. Year over year, the region posted the only gain nationally, growing 1.2 months. This reflects a continued recovery in the area since the pandemic.
“It’s notable that portfolio growth has been limited to the Middle States region,” Basu said. “After struggling in the immediate aftermath of the pandemic, the Midwest has seen surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity.”
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Courtesy of Associated Builders and Contractors
While the Commercial & Institutional and Heavy Industry sectors saw a month-on-month increase in the backlog of work in February, the infrastructure segment regained the most prominent gains in January, falling back to 8.9 months of work from the previous 10.
Despite uneven results across sectors and regions, contractors remained largely upbeat. According to the Construction Confidence Index, which measures construction professionals’ outlook for the next six months, sales and hiring expectations rose. Although the projection for profit margin growth was slightly lower in February than the previous month, all three indicators remained above 50, indicating expectations for growth.
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Courtesy of Associated Contractors and Builders
“While contractors remain mildly optimistic that their profit margins will expand over the next six months, this confidence may not survive the recent and precipitous rise in oil prices,” Basu said in the statement. “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.”
