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Dive brief:
- The construction backlog increased second consecutive month of Septembereven as contractors begin to think about future sales and profit margins, according to a statement Tuesday from the Associated Builders and Contractors.
- The total portfolio increased month-on-month to 8.7 months. 0.2 more months from August and a year earlier, according to the survey carried out from September 21 to October 5.
- Still, other pressures have emerged. “More than 1 in 4 contractors expect their profit margins to shrink over the next six months, the highest share since November 2025,” said Anirban Basu, ABC chief economist. “These same cost pressures have suppressed sales expectations, which also fell to an 11-month low in September.”
Diving knowledge:
Data center work continued to drive total backlog jumps, although awards disproportionately benefited larger contractors, Basu said in the statement.
According to ABC, roughly four out of ten contractors with more than $100 million in annual revenue work in the data center right now. For contractors with less than $100 million in annual revenue, the share of those working in the data center drops to 10%.
Also, 15 percent of ABC members under contract for data center projects reported 11.3 months behind schedule in September, three months longer than contractors without such work, Basu said.
At the same time, commercial and institutional backlog, which fell in mid-2026regained the highest level since July 2025. However, the heavy industrial portfolio fell to its lowest level since March, the report said.
The results show the gulf between construction winners and losers it is getting wider. at the same time, the increase in construction costs are creating headwinds for builders across the industry, Basu said.
“Rising material and labor costs and borrowing continue to put pressure on contractors,” Basu said.
