Data centers drive lopsided backlog gains

Take heed to the article
2 min

This audio is auto-generated. Please tell us in case you have feedback.

Dive Temporary:

• Construction backlog ticked up to 8.2 months in December, up 0.1 months from November, in keeping with an Related Builders and Contractors survey carried out Dec. 22 to Jan. 7.
• The divide between massive and small companies continued to develop. Contractors with greater than $100 million in annual income posted their highest backlogs since 2021, whereas these with lower than $30 million recorded their lowest ranges since 2021.
• Although contractor confidence improved by the top of the 12 months, ABC highlighted that general optimism decreased on a year-over-year foundation, in keeping with the report. For all contractors, general backlog was 0.1 months decrease than December 2024.

Dive Perception:

The widening gulf between massive and small contractors traces again to 1 pressure, stated Anirban Basu, ABC chief economist: the info middle development growth.

“Backlog fell sharply for smaller contractors throughout 2025,” Basu stated within the report. “That decline was largely as a result of the truth that nonresidential development momentum is confined to the info middle phase, and people initiatives are much more useful for the biggest contractors.”

The backlog divide will doubtless widen in 2026 as the info middle growth reveals no signs of a slowdown.

Contractors within the information middle area count on extra exercise over the subsequent 12 months, particularly as hyperscalers continue to push billion-dollar facilities at tempo. Emptiness charges are low within the sector, which signifies a lengthy runway for additional projects, stated James Bohnaker, senior economist at Cushman & Wakefield, a Chicago-based business actual property companies agency. 

Although that’s good news for contractors with information middle initiatives on their books, those that discover their companies exterior of the AI social gathering are seeing their backlogs shrink. 

In December, the 13% of ABC members below contract to work on a knowledge middle challenge had a considerably greater backlog than those that didn’t, stated Basu. Knowledge center-focused companies reported roughly 11 months of backlog, in comparison with 7.8 months for contractors with out information middle initiatives.

That break up is preserving general contractor confidence down. Although confidence ticked up in December, the extent nonetheless “stays properly under late-2024 and early-2025 ranges,” stated Basu.