The headline number looks fine. The distribution behind it does not.
Associated Builders and Contractors reported Tuesday that its Construction Backlog Indicator fell to 8.8 months in June, down 0.3 months from May. That’s still above the 8.7 months recorded in June 2025, and longer than backlog ran at any point between September 2023 and April 2026.
A 2.5-month backlog premium on data center work
“While backlog declined in June, it’s still longer than any point from September 2023 to April 2026,” said ABC chief economist Anirban Basu.
Then the split. Firms holding data center contracts average 2.5 more months of backlog than firms without. And 87% of builders don’t have a data center project at all.
Size determines access. Just 8% of contractors with less than $100 million in annual revenue have data center work under contract. Among contractors above $100 million, it’s 41%. Basu called that “a noticeable headwind for smaller contractors.”
That’s a five-fold difference in participation, and it maps onto exactly the qualification barriers you’d expect: bonding capacity, self-perform electrical and mechanical scale, prior mission-critical experience, and the balance sheet to carry a hyperscaler’s schedule. None of those are things a $60 million regional GC fixes in a quarter.
Margins compress even as sales confidence rises
ABC’s Construction Confidence Index moved in two directions. Sales and staffing expectations rose month over month. Profit margin expectations fell to a seven-month low.
“The effect of rising input prices may be weighing on contractor profitability,” Basu said, noting margin confidence remains above where it sat through the second half of 2025.
All three CCI readings stayed above the 50 threshold, which signals expected growth over the next six months. The pattern is familiar: contractors expect more work and less money per dollar of it.
What it means outside the AI buildout
Backlog at 8.8 months is a healthy number in isolation. Read alongside the participation split, it describes a two-track market. One track is booked out on hyperscale work with pricing power. The other is competing harder for a shrinking pool of warehouse, office and retail projects while input costs climb.
Contractors outside the data center pipeline have been finding depth elsewhere. Water and wastewater retrofits, corrections work like the 348-bed Santa Barbara County jail expansion, and heavy industrial process jobs all reward specialization rather than balance sheet size. That’s the durable answer to a market where scale is the qualifier.
Source: Construction Dive, ABC.