Commercial and industrial contractors reported 8.5 months of work under contract in August, up half a month from July, according to the Construction Backlog Indicator that Associated Builders and Contractors released Sept. 15. The reading is unchanged from a year earlier.
Buried in the same survey is the number that says more about where nonresidential construction is going: roughly one in six ABC members is currently under contract to work on a data center, which the association’s chief economist, Anirban Basu, called the highest proportion on record.
The backlog figure comes from a member survey conducted Aug. 20 through Sept. 4. ABC describes the indicator as a measure of the work its commercial and industrial contractor members expect to perform in the months ahead.
The data center premium is narrowing, for an unusual reason
Contractors with data center work reported 9.9 months of backlog in August against 8.3 months for everyone else — a gap of 1.6 months, down from the 2.5-month spread ABC reported in June, when data center contractors carried 11.0 months against 8.5 for the rest. RealtyWire covered that June reading.
Basu attributed the narrowing not to data center work cooling but to more firms getting a piece of it.
"Backlog rebounded from July’s cyclical low but remains below the prevailing level from the last several months," Basu said. "Data centers continue to keep contractors busy even as activity softens in other segments. Although the backlog gap between contractors with and without data center work narrowed in August (9.9 vs. 8.3 months, respectively), that appears to reflect more contractors securing work in the data center segment rather than a broader structural trend."
That dependence shows up elsewhere in ABC’s own numbers. In a Sept. 1 analysis of Census Bureau data, the association said July’s 0.1% increase in national nonresidential construction spending — $1.286 trillion on a seasonally adjusted annualized basis — was entirely attributable to data centers. Strip that category out, ABC said, and nonresidential spending fell for a second straight month to its lowest level since September 2023.
Small contractors are gaining, the largest are not
The August rebound was not evenly distributed. ABC said only the largest contractors saw backlog decline during the month, and that year-over-year gains were concentrated among firms with less than $30 million in annual revenue.
The association’s Construction Confidence Index, a separate diffusion measure of what contractors expect over the next six months, moved in two directions at once: the readings for sales and profit margins rose in August while the reading for staffing levels fell. All three remained above 50, the line that separates expected growth from expected contraction.
Labor is the constraint again
The staffing reading is where Basu spent his second comment, and it is the part of the release most relevant to anyone pricing a project this fall.
"The share of contractors that intend to cut their staffing levels over the next six months rose to 12.3% in August, the most in any month since December," Basu said. "At the same time, there was a sharp increase in the number of contractors who, unprompted, mentioned labor shortages in the survey. With construction job openings at a near two-year high, it appears that labor scarcity is reemerging as a major headwind for the industry."
Federal data supports the openings point. ABC’s Sept. 1 reading of the Job Openings and Labor Turnover Survey counted 326,000 unfilled construction positions on the last day of July, up 28,000 from June and up 21,000 from a year earlier. RealtyWire has tracked how the data center buildout has been pulling labor away from housing.
Costs are pushing the same direction. ABC’s Sept. 10 analysis of Bureau of Labor Statistics producer price data put construction input prices up 1.2% in August and 8.9% above year-ago levels, with nonresidential input prices up 1.2% for the month and 8.8% year over year. Basu said in that release that prices for iron and steel, softwood lumber, switchgear, copper wire and cable and several derivative metal products are each up more than 10% over 12 months.
Reading the two numbers together
Taken on its own, an 8.5-month backlog that is flat year over year looks like a stable market. Read alongside ABC’s spending analysis and the concentration Basu describes, it looks more like a market with one engine running hot and the rest idling — a pattern that also shows up in what it now costs to build the hot segment, with data center development costs up 21% per megawatt since late 2024, by Cushman & Wakefield’s count.
ABC is a national construction trade association founded in 1950, with 67 chapters and 24,000 members. It publishes the backlog and confidence indicators monthly; both are member surveys rather than government data, and the association revised the reference months for both series in May 2020 to better match the survey period.
