ConDig (11-Aug-26) — U.S. construction backlog fell to its lowest level since January in July, as weakness across most market segments outweighed continued strength in data center construction, according to the Associated Builders and Contractors (ABC).
ABC’s Construction Backlog Indicator declined to 8.0 months in July, down 0.8 months from both June and the same month a year earlier. Every industry, region and company size recorded a decline in backlog, although the South remained the only region with more work under contract than a year ago.
ABC Chief Economist Anirban Basu said booming demand for data centers continues to distort the broader market, with contractors working on those projects reporting significantly stronger pipelines than the rest of the industry.
Contractors with data center work reported an average backlog of 11.4 months, compared with 7.5 months for the 88% of ABC contractors not involved in the sector.
“The data center boom masks the depth of this weakness, as there is a lack of momentum in any other segment,” Basu said.
The disparity has been particularly challenging for smaller contractors. Companies generating between $30 million and $50 million in annual revenue reported their lowest backlog since March 2020, according to ABC.
Meanwhile, ABC’s Construction Confidence Index showed contractors remained optimistic about the next six months despite softer conditions. Confidence in sales and staffing declined in July, while expectations for profit margins improved. All three measures remained above the threshold of 50, indicating continued expectations for growth.
The Construction Backlog Indicator is based on an ABC member survey conducted between July 20 and Aug. 4.