Construction’s latest economic reports reveal less confidence despite more work

The pessimism stems from high construction costs and slow demand outside the data center boom.

More work on contractors’ books is offering little assurance of stronger returns in the future.

Backlog increased for a second consecutive month in September to 8.7 months, according to Associated Builders and Contractors. Yet, more than a quarter of contractors expected their profit margins to shrink over the next six months, the highest share since November 2025. Sales expectations also dropped to an 11-month low.

The pessimism stems from rising construction costs, coupled with much of the momentum being concentrated in the artificial intelligence buildout.

Construction input prices, for example, jumped 11.2% from a year earlier in September, the largest annual increase in nearly four years, according to ABC. Contractors during that span absorbed much of that cost escalation, according to Associated General Contractors of America.

But on a positive note, signs of activity popped up over the past month in other types of construction too.

Education and healthcare projects pushed nonresidential planning higher in September, according to Dodge Construction Network. Institutional groundbreakings as a whole improved in September as well, according to Dodge.

Nevertheless, data center projects still account for a majority of construction momentum, especially around spending. Construction spending on the data center boom surged 8.6% in September, according to ABC’s analysis of Census Bureau data. Without the data center and closely related power category boost, nonresidential spending fell.

ABC members with data center contractors reported 11.3 months of backlog, three months more than firms without those projects. Just 15% of ABC members had such work under contract.

Read below for Construction Dive’s roundup of the latest economic data.

Education, healthcare projects boosted construction planning in September

Contractors’ backlog jumped in September as profit outlook fell

Iran conflict pushes construction prices to near 4-year high

Commercial groundbreakings plunged 18% in September

Data centers kept nonresidential construction spending positive in September