Data Center Subs Carry 1.6 More Months of Backlog as Spending Surges
ABC members with data center work carry 9.9 months of backlog versus 8.3 months for those without, ENR reports, as data center spending runs at a 149% annualized pace since March.
Market Impact
Data center construction spending rose 7.5% in August and is more than 73% above a year earlier, according to an Associated Builders and Contractors analysis of Census Bureau data released Oct. 1. The 149% figure is a rate, not a total. ABC calculates the growth over the past five months and expresses it as if it continued for a full year, so spending has not risen 149% since March. ABC Chief Economist Anirban Basu said it is “becoming difficult to contextualize the size and speed of this boom.”
The boom is masking a mixed market. Total nonresidential spending rose 0.7% in August to a seasonally adjusted annual rate of $1.309 trillion, a fifth straight monthly gain. Power construction rose 0.8% for the month and 8.5% year over year. Manufacturing ticked up 0.2%, its first monthly gain since January, but remains 19.2% below August 2025. Highway and street spending rose 0.2% for the month and 4.6% year over year.
Costs are the pressure point. Construction input prices rose 1.2% in August and are 8.9% above a year earlier, per a separate ABC analysis of Bureau of Labor Statistics data. In the AGC-NCCER survey, 55% of respondents said projects were canceled, postponed or scaled back in the prior six months, and one-third of them blamed rising costs. Basu expects momentum to stay concentrated in data centers and power, with higher Treasury yields adding to borrowing costs.
What It Means for Subcontractors
- Use the backlog gap to size capacity. ABC says roughly one in six member contractors now has data center work under contract. Those firms report 1.6 more months of backlog than peers. Electrical, mechanical and sitework subs can treat that as a benchmark. If your crews are booked past roughly 10 months, expect GC schedule asks to compete with work already in hand. This is our inference, not an ABC finding.
- Don’t read the Census data as new bids. The figures measure construction put in place, not new project starts. The 7.5% August jump reflects work already under way, so it does not show packages about to be released.
- Build price escalation into quotes. Input costs are up 8.9% year over year and rose 1.2% in August alone. On materials-heavy electrical and mechanical packages, push for escalation clauses or short price-hold windows, especially on longer data center schedules.
- Plan for labor competition. In the AGC-NCCER survey, 28% of respondents did data center work in the past year, and 58% of those firms said it increased competition for skilled workers. Electricians and pipefitters are the obvious pressure points. Build wage escalation into bids and retention plans before committing crews to multiple data center GCs.
- Watch your exposure outside data centers. Manufacturing construction is still 19.2% below last year, while power is up 8.5%. Subs heavy in manufacturing work can look to power projects as a nearer-term adjacent market, per Basu’s expectation that growth concentrates in data centers and power.
- Vet owner financing. With 55% of AGC respondents reporting canceled, postponed or scaled-back projects and Treasury yields rising, confirm funding and payment terms on any new data center award before mobilizing.
