Heavy industrial fell sharply to 5.15 months from 6.80, marking the steepest one-month drop among all categories. Year-over-year, infrastructure showed the largest increase, up 2.1 months, while heavy industrial contracted 0.7 months.

By region, the South led in July at 9.79 months, up from 9.38 in June, followed by the West at 8.66 (up from 8.03) and the Middle States at 7.98 (up from 7.31). 

The Northeast dropped to 8.11 months from 9.20 in June, the largest regional decline. Compared with a year earlier, backlog increased in every region except the South, which still holds the highest figure nationally.

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Backlog also varied by firm size. Contractors with annual revenue above $100 million reported 12.35 months of work under contract in July, up from 11.87 in June and 10.43 a year earlier. Those in the $30 million–$50 million range rose to 9.22 months from 8.83 in June, and $50 million–$100 million firms inched up to 9.30 months from 9.24. The smallest firms, under $30 million, averaged 7.91 months, down slightly from 8.02 in June.

Confidence Wanes in July

ABC’s Construction Confidence Index showed mixed sentiment in July. The sales reading fell to 60.4 from 62.8 in June, and profit margins dropped to 51.8 from 53.5. However, staffing expectations improved to 62.4 from 59.4—the highest since April. 

Still, all figures remain above the 50-point threshold, signaling growth expectations over the next six months. Only 1.8% of respondents expect significant profit margin gains during that period, down from 4.1% in June and the lowest since October 2024. More than 80% of members said they have received tariff-related price increase notices.

ABC Chief Economist Anirban Basu said July’s increase reflects strong demand for data centers—now part of the backlog for about one in eight members—as well as substantial growth in infrastructure work. 

“While backlog rose, contractor confidence slipped in July, especially with regards to profit margins,” Basu said in the release. “Fewer than 2% of ABC members expect their profit margins to increase significantly over the next six months, the fewest since October 2024.”

Basu said the bearish sentiment is likely due to trade policy and the recent acceleration in materials price escalation, noting that “More than 80% of ABC members have been notified of tariff-related price increases.” 

He noted that public construction has outpaced private work in recent months but warned that rising material costs tied to trade policy are weighing on contractors’ profit expectations.

“Backlog continued to rise in July despite the ongoing decline in construction spending,” Basu added. “Some of that strength can be attributed to the fact that 1 in every 8 ABC members is currently under contract to perform work on a data center project … and public construction activity has outperformed the private sector over the past several months.”

Associated Builders and Contractors