The Associated Builders & Contractors (ABC) reports that its Construction Backlog Indicator rose to 8.1 months in February, according to an ABC member survey conducted Feb. 20 to March 6.
The reading is up 0.1 months from January but down 0.2 months compared to a year earlier.
Backlog increased sharply during February in the Middle States region: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Notably, the Middle States is the only region with higher backlog than one year ago.
ABC’s Construction Confidence Index readings for sales and staffing levels increased again in February, while the reading for profit margins fell. Sales expectations are better than they were one year ago, while profit margin and staffing expectations are slightly worse. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
“Backlog bounced back from January’s four-year low, yet it remains subdued by historical standards,” says Anirban Basu, ABC’s chief economist . “It’s notable that backlog growth has been confined to the Middle States region. After struggling in the immediate aftermath of the pandemic, the Midwest has posted surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity.
“Contractors under contract to work on data centers (11.2 months) continue to have significantly longer backlog than those who are not (7.6 months),” Basu adds. “While data center work should continue apace over the next few quarters, the conflict in Iran, which began during the middle of this month’s CBI survey period, may suppress demand for other forms of construction work due to elevated materials prices, borrowing costs and uncertainty.”
Addressing the increase in contractor confidence, Basu expressed caution in the face of increasing gas prices.
“While contractors remain slightly optimistic that their profit margins will expand over the next six months, that confidence may not survive the recent and precipitous increase in oil prices,” he says. “Rising input costs, if persistent, could weigh on hiring expectations, which were particularly upbeat in February. The Construction Confidence Index series for staffing level expectations rose to the highest level since March 2025.”