The backlog fell again in October, with Associated Builders and Contractors reporting an average of 8.4 months based on member responses from Oct. 20 to Nov. 4. The reading is the lowest since May and marks the third consecutive monthly decline after peaking in July, according to the ABC data series.
The pullback continues to fall hardest on smaller companies. Contractors with less than $30 million in annual revenue posted 7.29 months of delays in October, more than a full month less than in August.
Larger firms tied to data center manufacturing and construction remain the stabilizing force: contractors active in data center projects reported 10.9 months behind schedule, compared to 8.0 months for those without such work.
ABC data shows regional results widened as backlog in the North East continued its steady decline that began in July, falling from 8.11 months to 7.65 in October.
The Middle States retreated from a late summer high, while the West rebounded to 8.12 months after a weak September. The South continued to record the strongest readings, near 9.6-11.2 months throughout the period.
ABC confidence readings showed the same softening, with sales expectations unchanged in October, but the outlook for profit margins and staffing declined.
All three indexes remained above 50, indicating that companies still expect growth in early 2026, but with tighter margins and more cautious hiring.
“Nearly 65 percent of contractors indicated they believe the U.S. construction industry is contracting,” said ABC Chief Economist Anirban Basu. He noted that 23% of companies surveyed expect sales to fall in the next six months, the highest share in more than a year.
The combination of a three-month delay and weaker margin expectations points to more competitive bidding conditions as companies work to maintain workloads over the winter.
