ABC’s Construction Backlog Climbs to 8.1 Months, Led by Midwest Gains

WASHINGTON, DC — The Related Builders and Contractors reported that its Development Backlog Indicator rose to eight.1 months in February, in accordance with an ABC member survey performed Feb. 20 by March 6.

The studying elevated 0.1 months from January, although it stays 0.2 months decrease than February 2025.

Center States Area Drives Backlog Development

Backlog rose sharply throughout February throughout the Center States area, which incorporates Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

Notably, the Center States is the one area reporting larger backlog in contrast with one 12 months in the past, highlighting stronger challenge pipelines within the central portion of the nation.

Contractor Confidence Blended however Nonetheless Constructive

ABC’s Development Confidence Index confirmed improved expectations for gross sales and staffing ranges in February, whereas revenue margin expectations declined barely.

Gross sales expectations are stronger than they had been one 12 months in the past, whereas expectations for revenue margins and staffing are modestly weaker. Nevertheless, all three elements stay above the edge of fifty, indicating contractors nonetheless count on development over the subsequent six months.

Rising Inputs on the Horizon

“Backlog bounced again from January’s four-year low, but it stays subdued by historic requirements,” mentioned ABC Chief Economist Anirban Basu. “It’s notable that backlog development has been confined to the Center States area. After struggling within the rapid aftermath of the pandemic, the Midwest has posted surprisingly sturdy inhabitants and financial development over the previous 12 months, and that development has clearly translated into elevated ranges of building exercise. 

“Contractors underneath contract to work on information facilities (11.2 months) proceed to have considerably longer backlog than those that usually are not (7.6 months),” mentioned Basu. “Whereas information middle work ought to proceed apace over the subsequent few quarters, the battle in Iran, which started throughout this center of this month’s CBI survey interval, might suppress demand for different types of building work attributable to elevated supplies costs, borrowing prices and uncertainty. 

“Whereas contractors stay barely optimistic that their revenue margins will increase over the subsequent six months, that confidence might not survive the current and precipitous enhance in oil costs,” mentioned Basu. “Rising enter prices, if persistent, might weigh on hiring expectations, which had been significantly upbeat in February. The CCI collection for staffing degree expectations rose to the very best degree since March 2025.”