Commercial contractors reported a second consecutive month of growing workloads in September, and once again the growth traces back to a single building type. The Construction Backlog Indicator compiled by Associated Builders and Contractors rose to 8.7 months, up 0.2 months from August and 0.2 months from September 2025.
The gain came with a warning attached. In the same survey, contractors’ expectations for their own profit margins deteriorated sharply, and their sales expectations fell to an 11-month low.
“Backlog increased for the second straight month in September as data center work continues to keep contractors busy,” ABC chief economist Anirban Basu said in the trade group’s Oct. 13, 2026 release. The survey of ABC member firms was conducted Sept. 21 through Oct. 5, 2026.
A two-tier market
The data center numbers in the survey describe a construction economy splitting along the lines of who can win that work. About 15% of ABC members hold data center contracts. Those members reported an average backlog of 11.3 months β roughly three months more than members without data center work.
Access to the pipeline is heavily concentrated by firm size. Among contractors with more than $100 million in annual revenue, 39% reported data center work. Among those below $100 million in revenue, the share was about one in 10.
That is the practical meaning of a backlog figure that keeps drifting upward while contractors describe tightening conditions: the aggregate is being carried by a segment of large firms attached to hyperscale projects, and the typical mid-sized contractor is not in it. RealtyWire reported the same split in ABC’s August survey, when one in six members said they performed data center work and backlog rebounded to 8.5 months.
Where the work moved
By sector, the composition shifted in September. Commercial and institutional backlog, which dipped in the middle of the year, climbed to its highest level since July 2025. Heavy industrial backlog moved the other way, falling to its lowest reading since March β though it remains 0.5 months higher than it was a year ago.
The Construction Backlog Indicator measures how many months of contracted work member firms expect to perform. ABC describes it as the only economic indicator that reflects the volume of commercial and industrial work contractors have under contract for the months ahead. A rising figure means work has been signed; it does not mean the work is more profitable.
Confidence holds, barely
ABC’s companion Construction Confidence Index moved in two directions at once. All three components β sales, profit margins and staffing levels β stayed above 50, the threshold that in a diffusion index signals that more contractors expect growth than contraction over the next six months. Staffing expectations rose in September.
Both the sales and profit margin readings fell, however. Sales expectations hit an 11-month low. More than one in four contractors now expect their profit margins to shrink over the next six months, the largest share since November 2025.
Basu attributed the pressure to rising materials, labor and borrowing costs. Each of those is visible elsewhere in the data: ABC reported in September that construction materials prices jumped again in August, and borrowing costs have climbed with the broader move in interest rates that September’s reacceleration in inflation has done nothing to reverse.
What it means for projects now in planning
For developers and owners, the September reading cuts two ways. Backlog near nine months means capable contractors are not sitting idle, which on our reading supports firm bid pricing rather than the discounting that comes with a slump.
But on our reading, the margin expectations are the number worth watching. When a quarter of contractors expect margins to compress while backlog is still growing, the squeeze is coming from input costs rather than from a shortage of work, and contractors generally respond by pricing contingency into bids, tightening escalation clauses and becoming more selective about which jobs they chase. Owners outside the data center boom are the ones most likely to feel that selectivity.
The concentration risk runs the other way too. A backlog figure propped up by one asset class is only as durable as demand for that asset class, and the political ground under data centers has been shifting: Oregon froze air and water permits for new data centers until July 2027, and a poll released this month put local opposition to nearby data centers at 69%. ABC’s next backlog survey will be the first read on whether any of that has reached contractors’ order books. Further construction and development coverage is collected on RealtyWire’s commercial real estate page.
