Data centres hold up US order backlogs but contractor confidence slips

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That’s the message from Associated Builders and Contractors’ (ABC) latest Construction Backlog Indicator.

A survey of ABC members conducted between 20 October and 4 November revealed that the Construction Backlog Indicator fell to 8.4 months in October, down 0.1 months since September but unchanged from October 2024.

Backlog was flat in commercial and institutional work at 8.5 months, increased in heavy industrial to 8.8 months (from 8.1 in October 2024), and also rose in infrastructure to 9.8 months (from 8.9 months in October 2024).

But the ABC said that backlog for respondents that do not primarily operate in any one industry - generally the smallest contractors responding to the survey - fell sharply for the month and stands at just 5.8 months.

ABC’s Construction Confidence Index reading for sales was unchanged in October, while the readings for profit margins and staffing levels both fell.

However, the readings for all three components remained above the threshold of 50, indicating expectations for growth over the next six months.

ABC chief economist Anirban Basu said, “Nearly 65% of contractors indicated that they think the US construction industry is contracting, according to ABC’s October survey.”

“This dismal assessment accompanied the lowest backlog reading since May, and 23% of contractors expect their sales to decline over the next six months, the highest share in over a year. These findings are consistent with an industry that is sustained by still-elevated manufacturing construction and a surging data centre sector.”

ABC said that one in seven US contractors are under contract to work on data centres. Those contractors with data centre work have significantly higher backlog (10.9 months) than those without (8.0 months).