Breaking news from the construction industry: contractor confidence continues to slide despite data center and manufacturing projects sustaining growth. According to a new report released on Monday, November 13, 2025, by the Associated Builders and Contractors (ABC), one of the nation's largest construction trade associations, the construction industry faces mounting headwinds with contractors expressing unprecedented pessimism about market conditions.
The Associated Builders and Contractors released its monthly Construction Backlog Indicator (CBI) for October 2025 on November 13, 2025, revealing concerning trends for contractors nationwide:
According to Anirban Basu, chief economist at ABC, in a statement provided to contractors and industry observers: "This dismal assessment accompanied the lowest backlog reading since May, and 23% of contractors expect their sales to decline over the next six months, the highest share in over a year. These findings are consistent with an industry that is sustained by still-elevated manufacturing construction and a surging data center sector."
The Construction Backlog Indicator is a critical metric that measures the average number of months of work contractors have ahead of them. The October reading of 8.4 months represents:
For construction professionals, this declining backlog signals tightening project pipelines and potentially reduced revenue visibility through the fourth quarter and into 2026. Contractors who typically plan capital investments and staffing levels based on backlog projections face uncertainty as future work becomes less certain.
While the overall industry shows weakness, specific construction segments tell different stories. According to the ABC report released November 13, 2025:
The data reveals a bifurcated construction market: some segments are holding steady while smaller, specialized contractors operating across multiple industries face severe project pipeline pressures. This creates challenges for general contractors and subcontractors who depend on steady project flow to maintain workforce stability.
Despite overall industry contraction concerns, two specific market segments are driving growth and sustaining contractor employment:
This data center advantage has profound implications for construction employment and contractor profitability. Contractors positioned in artificial intelligence (AI) infrastructure development and advanced manufacturing are experiencing dramatically better market conditions than their peers working in traditional commercial and residential construction.
The ABC's Construction Confidence Index—which measures contractor expectations for sales, profit margins, and staffing levels over the next six months—reveals growing concern about the industry's near-term prospects:
The fact that profit margin and staffing confidence declined month-over-month suggests contractors are tightening operations in anticipation of softer demand. This typically precedes workforce reductions and increased price competition, putting downward pressure on project margins across the industry.
For construction professionals and contractors navigating October 2025 market conditions, the ABC report signals several critical trends:
Project Pipeline Pressure: With backlog at its lowest point since May, contractors face intensifying competition for new projects. This often leads to margin compression as firms bid more aggressively to maintain workflow.
Workforce Planning Challenges: Lower confidence in staffing levels suggests contractors may reduce headcount or delay hiring. For skilled workers and supervisory staff, this creates potential employment uncertainty heading into 2026.
Data Center Opportunity Window: Contractors with experience in data center construction, AI infrastructure, or specialized manufacturing can command premium pricing and maintain robust project backlogs while peers struggle.
Geographic and Specialty Advantages: The bifurcated market suggests successful contractors will be those positioned in data center corridors, advanced manufacturing regions, or serving specialized infrastructure needs.
The ABC survey was conducted from October 20 to November 4, 2025, capturing contractor sentiment during a period of heightened economic uncertainty. The survey results represent input from construction firms of varying sizes across multiple construction specialties and regions.
"These findings are consistent with an industry that is sustained by still-elevated manufacturing construction and a surging data center sector," Basu noted, emphasizing that growth is concentrated rather than broad-based. This concentration creates risk for contractors not positioned in these high-growth segments.
Construction professionals should closely watch several leading indicators in coming months:
Source: Associated Builders and Contractors (ABC) Construction Backlog Indicator, November 13, 2025. Economist: Anirban Basu, Chief Economist at ABC. Survey conducted October 20 - November 4, 2025.
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