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Dive Brief:
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Over the past 12 months, only infrastructure construction has added on to contractors’ pipelines, according to ABC. Other commercial and institutional work lagged.
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Contractor confidence showed mixed signals in September, as profit margins and staffing outlooks improved but sales expectations declined, according to the report.
Dive Insight:
The stability in backlog underscores how a pair of sectors continue to anchor construction pipelines, even as overall private-sector activity weakens.
“Falling industrywide employment, a dearth of job openings and ongoing decreases in construction spending have not diminished ABC contractor member backlog or confidence,” said Anirban Basu, ABC chief economist, in the release. “This stability primarily stems from two sources.”
First, public sector construction has fared much better than private-level activity for much of this year, said Basu. That has supported an elevated backlog in infrastructure.
Yet the momentum faces a new challenge. The federal government remains shut down as of Wednesday, meaning projects relying entirely on federal dollars could face temporary suspensions. The shutdown began Oct. 1, during ABC’s survey period. Infrastructure backlog ticked down by 1.7 months compared to the previous month’s report, though still remains up 1.6 months over the past year.
Despite concern around public projects, the second source of industry momentum is data centers, said Basu. That shows little sign of slowing down.
“Approximately 1 in 5 contractors was under contract to work on a data center project in September,” said Basu. “While that’s a slightly lower share than in August, contractors that have data center work had significantly higher backlog than those who did not.”
Data center projects now make up the bulk of private nonresidential construction. Contractors active in that space report roughly 12 months of backlog, compared to about eight months for those without data center work.
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