The backlog narrowed in June, but builders remain bullish

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Dive Brief:

• The construction backlog has been reduced from May to June, although the number of building contractors on the books remained slightly elevated compared to last year, according to a statement Tuesday from the Associated Builders and Contractors.
• Book work fell month-on-month to 8.8 months in June, down 0.3 months from May. This remained a level above the rate of a year ago: contractors measured 8.7 months of work in June 2025.
• The main driver of booked work remains data center construction, said Anirban Basu, ABC’s chief economist. Companies with data center contracts they have an average of 2.5 more months of work ahead of them than unemployed builders in this sector.

Diving knowledge:

Although the numbers declined from May to June, Tuesday’s report comes after an all-time high for the backlog.

“Although the backlog narrowed in June, it is still longer than any point from September 2023 to April 2026,” Basu said in the statement.

As with previous reports, the vast majority of builders, 87%, have no data center projects. Those that do report higher lag, and are often already older builders.

“This trend is notable for smaller contractors: only 8 percent of contractors with less than $100 million in annual revenue have data center work under contract, well below the 41 percent share of contractors with more than $100 million in annual revenue,” Basu said.

Meanwhile, ABC’s construction confidence index for sales and staffing levels rose month-on-month in June. The reading of profit margins, however, gradually declined. All three metrics remained above the 50 threshold, indicating that ABC members expect growth over the next six months.

“The effect of rising input prices may be affecting the contractor’s profitability,” Basu said. “Contractor confidence in profit margins fell to a seven-month low in June, although expectations remain above the prevailing level from the second half of 2025.”