ABC's Construction Backlog Climbs to 8.1 Months, Led by Midwest Gains

WASHINGTON, DC — The Associated Builders and Contractors reported that its Construction Backlog Indicator rose to 8.1 months in February, according to an ABC member survey conducted Feb. 20 through March 6.

The reading increased 0.1 months from January, though it remains 0.2 months lower than February 2025.

Middle States Region Drives Backlog Growth

Backlog rose sharply during February across the Middle States region, which includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

Notably, the Middle States is the only region reporting higher backlog compared with one year ago, highlighting stronger project pipelines in the central portion of the country.

Contractor Confidence Mixed but Still Positive

ABC’s Construction Confidence Index showed improved expectations for sales and staffing levels in February, while profit margin expectations declined slightly.

Sales expectations are stronger than they were one year ago, while expectations for profit margins and staffing are modestly weaker. However, all three components remain above the threshold of 50, indicating contractors still expect growth over the next six months.

Rising Inputs on the Horizon

“Backlog bounced back from January’s four-year low, yet it remains subdued by historical standards,” said ABC Chief Economist Anirban Basu. “It’s notable that backlog growth has been confined to the Middle States region. After struggling in the immediate aftermath of the pandemic, the Midwest has posted surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity. 

“Contractors under contract to work on data centers (11.2 months) continue to have significantly longer backlog than those who are not (7.6 months),” said Basu. “While data center work should continue apace over the next few quarters, the conflict in Iran, which began during this middle of this month’s CBI survey period, may suppress demand for other forms of construction work due to elevated materials prices, borrowing costs and uncertainty. 

“While contractors remain slightly optimistic that their profit margins will expand over the next six months, that confidence may not survive the recent and precipitous increase in oil prices,” said Basu. “Rising input costs, if persistent, could weigh on hiring expectations, which were particularly upbeat in February. The CCI series for staffing level expectations rose to the highest level since March 2025.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month's work under contract based on the latest financials available, while CCI measures contractors' outlook for the next six months. View the methodology for both indicators.

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.