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Dive brief:
- Construction backlog increased to 8.2 months in December, up 0.1 months from November, according to a survey of builders and associated contractors conducted from Dec. 22 to Jan. 7.
- The divide between large and small businesses continued to grow. Contractors with more than $100 million in annual revenue reported their highest levels since 2021, while those with less than $30 million reported their lowest levels since 2021.
- While contractor confidence improved at the end of the year, the ABC noted that overall optimism declined year-on-year, the report said. For all contractors, the overall work backlog was 0.1 months lower than in December 2024.
Diving knowledge:
The widening chasm between large and small contractors can be traced back to one force, said Anirban Basu, ABC’s chief economist: the data center construction boom.
“The backlog fell sharply for smaller contractors during 2025,” Basu said in the report. “This decline was largely due to the fact that the non-residential construction drive is limited to the data center segment, and these projects are much more beneficial to larger contractors.”
Data portfolio gap likely to widen by 2026 as data center boom shows no sign of slowing down.
Contractors in the data center space expect more activity over the next 12 months, especially hyperscalers continue to power billion-dollar facilities to the beat Vacancy rates are low in the sector, which indicates a long track for additional projectssaid James Bohnaker, senior economist at Cushman & Wakefield, a Chicago-based commercial real estate services firm.
While that’s excellent news for contractors with data center projects on their books, those who find their companies out of the AI party are seeing their delays shrink.
As of December, 13 percent of ABC members hired to work on a data center project had a significantly larger backlog of work than those who didn’t, Basu said. Companies focused on data centers reported approximately 11 months of delay, compared to 7.8 months for contractors without data center projects.
This division keeps the overall confidence of the contractor low. Although confidence rose in December, the level still “remains well below the levels of late 2024 and early 2025,” Basu said.
