The Daily Dig
Associated Builders and Contractors reported its Construction Backlog Indicator fell to 8.8 months in June. The figure comes from a member survey run from June 22 to July 8. That's down 0.3 months from May but up 0.1 months from June 2025, so backlog is still running slightly ahead of last year's pace. Basu noted the reading remains longer than at any point from September 2023 through April 2026.
Regional results were mixed. The Middle States region was the only one to post backlog growth on a monthly basis in June. The Northeast saw a sharp contraction instead, with backlog now down more than a full month compared to a year ago.
Continued data center construction is a major driver of that ongoing strength, according to Basu. The 13% of members currently under contract for data center work are carrying a backlog of 11.0 months. That compares to 8.5 months for the 87% without that work. The divide is sharper by company size. Just 8% of contractors under $100 million in annual revenue have data center work under contract, compared to 41% of contractors above that threshold.
Confidence readings told a similar story of strength with some cracks showing. ABC's Construction Confidence Index showed rising expectations for sales and staffing over the next six months, while the reading for profit margins slipped. All three components remain above the growth threshold of 50. Basu pointed to rising input prices as the reason contractor profitability is under pressure, with the margin reading hitting a seven-month low even though it stays above where it sat in the second half of 2025.
Snapshot:
Indicator: Construction Backlog Indicator (CBI)
June Reading: 8.8 months
Month over Month Change: Down 0.3 months from May
Year over Year Change: Up 0.1 months from June 2025
Historical Context: Longer than any point from September 2023 to April 2026
Survey Period: June 22 to July 8
Regional Growth: Middle States, only region with monthly backlog growth
Regional Weakness: Northeast, down over a month year over year
Data Center Contractors (13% of members): 11.0 months backlog
Non Data Center Contractors (87% of members): 8.5 months backlog
Data Center Work Under Contract, Sub $100M Revenue Firms: 8%
Data Center Work Under Contract, $100M Plus Revenue Firms: 41%
CCI Sales Reading: Increased
CCI Staffing Reading: Increased
CCI Profit Margins Reading: Declined, seven-month low
CCI Threshold: 50, all three components above this line, reflecting six-month forward expectations
Source: Associated Builders and Contractors (ABC), Chief Economist Anirban Basu
TheJobWalk Thoughts
The revenue split behind data center backlog is worth flagging for smaller firms. Contractors under $100 million in revenue are far less likely to have data center work under contract than larger firms, 8% versus 41%. That gap is a real headwind, and it points toward specialty scopes or tier two subcontracting as a route worth exploring into that segment.
The Northeast decline is worth watching beyond its own region. A backlog drop of over a month year over year is a meaningful shift, and firms with exposure there should be reviewing their pipeline now rather than waiting for next quarter's numbers to confirm the trend.
Margin sentiment is the softer spot in an otherwise strong report. Sales and staffing confidence are climbing, but profit margin sentiment just hit a seven-month low as input prices rise. That is a good reason to push for tighter escalation clauses on new contracts while overall demand remains strong.
