Construction Backlog Hits 10-Month High, but Smaller Contractors Are Being Left Behind
According to Construction Dive, construction backlog climbed to 8.8 months in April, a 10-month high, but the gains are almost entirely concentrated among the largest contractors, particularly those with data center work, according to the Associated Builders and Contractors.
Market Impact
The split between large and small contractors is stark. Among firms with more than $100 million in annual revenue, 42% are currently under contract for data center projects. That number drops to just 7% for contractors under that revenue threshold. Contractors with data center work are carrying about 12.2 months of backlog, roughly four months more than those without those jobs, according to ABC chief economist Anirban Basu.
“Booming data center construction has almost exclusively benefited the largest ABC members,” Basu said. Every other contractor size category, those under $100 million in annual revenue, has a smaller backlog today than it did one year ago.
Despite the slowdown in new projects, smaller builders are holding onto their optimism. ABC’s Construction Confidence Index, which tracks outlooks over the next six months, rose across sales, profit margins, and staffing levels. Basu noted that only one in five contractors expect profit margins to shrink over the next six months, the fewest since January 2025.
What It Means for Subcontractors
- If your primary clients are mid-size general contractors under $100M in revenue, expect continued pressure on bid volume and award timelines heading into summer.
- Data center work is concentrating rapidly at the top tier. If you haven’t already, assess whether your services, electrical, civil, mechanical, or site prep, can be positioned toward hyperscale or AI infrastructure projects.
- Confidence among smaller builders remains high despite thinner backlogs, which may signal competitive bidding pressure as more firms chase a smaller pool of available work.
- Monitor materials pricing closely. Basu flagged “emerging materials price escalation” as a headwind, even as it hasn’t yet dented member confidence. Subcontractors should review escalation clauses in any contracts signed now for work later in 2026.
