Construction Backlogs Dip Amid Shifting Industry Demand

Construction Backlogs Dip Amid Shifting Industry Demand

Construction project backlogs continued to decline in September, according to the latest data from Associated Builders and Contractors (ABC). The dip reflects a slowdown in contractor sales expectations, driven by reduced demand across several key industries.

Despite the softening in demand, contractors remain cautiously optimistic. ABC’s survey found that many still anticipate growth in profit margins and staffing levels over the next six months.

Backlogs—defined as the volume of contracted projects that are yet to be completed or billed—have trended downward over the past year in sectors such as commercial, institutional, and heavy industrial construction. In contrast, the public infrastructure sector has seen a modest increase in backlog levels.

One bright spot is the continued growth in data center construction. “Approximately one in five contractors was under contract to work on a data center project in September,” said ABC Chief Economist Anirban Basu. “While that’s a slightly lower share than in August, contractors involved in data center work reported significantly higher backlogs—averaging 12 months—compared to just eight months for those without such projects.”