ABC Survey: 1 in 6 Members Perform Data Center Work; Backlog Rebounds in August

Associated Builders and Contractors reported today that its Construction Backlog Indicator rebounded to 8.5 months in August, according to an ABC member survey conducted Aug. 20 to Sept. 4. The reading is up 0.5 months from July and unchanged on a year-ago basis. 

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Only the largest contractors experienced a decline in backlog in August. On a year-over-year basis, backlog gains are concentrated among the smallest contractors (those with less than $30 million in annual revenues).

ABC’s Construction Confidence Index readings for sales and profit margins increased in August, while the reading for staffing levels fell. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Backlog rebounded from July’s cyclical low but remains below the prevailing level from the last several months,” said ABC Chief Economist Anirban Basu. “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. Roughly 1 in 6 ABC members is currently under contract to work on a data center, the highest proportion on record.  

“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,” said Basu. “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.”