Construction backlog climbed to its highest level in nearly three years in May, and on paper that looks like good news. Work on the books rose to 9.1 months, up 0.3 from April, according to Associated Builders and Contractors’ Construction Backlog Indicator. Read past the headline, though, and the number is doing a lot of hiding.
Confidence went the other way. ABC’s Construction Confidence Index slipped in the same month the backlog reading rose, an odd pairing that usually signals contractors don’t trust the strength to hold. When firms have more work booked but feel worse about the months ahead, something in the mix is uneven.
A two-speed market
The unevenness has a name: data centers. Contractors with data center awards reported 11.6 months of backlog in May. Everyone else reported 8.6. That’s a three-month gap between firms riding the AI buildout and firms that aren’t, and it’s the gap doing most of the work in the average.
“Backlog rose to a nearly three-year high in May,” said Anirban Basu, ABC’s chief economist. “This increase largely reflects the massive data center investments taking place across the nation.” In other words, strip out the hyperscale projects and the picture is closer to flat than to booming.
For a contractor outside the data center vertical, 8.6 months of backlog isn’t bad. It’s just not the recovery the top-line figure implies. The risk is reading 9.1 months as broad demand and staffing up for work that’s concentrated in a handful of regions and a handful of owners.
What it means heading into summer
The split lines up with what other indicators have been saying all spring. Nonresidential demand has leaned hard on a few hot categories while traditional commercial and institutional work stays cautious. A backlog built on data centers is only as durable as the AI capital cycle behind it, and confidence cooling while backlog rises suggests contractors already sense that.
The practical takeaway for bid strategy: know which side of the line your pipeline sits on. Firms chasing data center scopes are competing on speed and capacity. Firms that aren’t should be careful about reading the May number as a green light. Exchange has followed the same divide through April construction spending data and the Architecture Billings Index. ABC’s full release is available here.