ABC Backlog Hits 8.7 Months as Margin Outlook Weakens
Contractor backlog climbed to 8.7 months in September, up 0.2 months from August, even as more than one in four contractors now expect their profit margins to shrink over the next six months. Construction Dive reports the figures come from an Associated Builders and Contractors survey conducted Sept. 21 to Oct. 5 and released Oct. 14.
That margin share is the highest since November 2025, ABC chief economist Anirban Basu said. Sales expectations fell to an 11-month low. Basu pointed to rising materials, labor and borrowing costs.
The backlog is not evenly spread. ABC members under contract for data center projects (15% of members) reported 11.3 months of backlog, three months more than contractors without that work. About four in ten firms above $100 million in annual revenue have data center work, versus 10% of smaller firms. By our inference, non-data-center backlog sits near 8.3 months. Commercial and institutional backlog hit its highest level since July 2025, while heavy industrial fell to its lowest since March.
What It Means for Subcontractors
- Price the margin squeeze in. ABC’s survey shows costs are outrunning sales expectations. Bids that carry flat unit pricing on materials and labor through a long schedule leave you holding the risk the survey describes.
- Push for escalation language. Materials, labor and borrowing costs are all rising per ABC. Ask for escalation clauses or short price-validity windows on packages that run into spring 2027, the end of the survey’s six-month margin horizon.
- Target the stronger segments. Commercial and institutional backlog is at its highest level since July 2025. Heavy industrial backlog is at its lowest level since March, so expect tighter competition on those bids. Firms under $100 million have far less data center access.
