The latest report from Associated Builders and Contractors shows that the Construction Backlog Indicator dipped to 8.0 months in January, marking a slight decline from December and from this time last year. While overall backlog has softened, the impact is not evenly distributed. Larger contractors, particularly those with more than $50 million in annual revenue, continue to see stronger backlog levels, while smaller firms are experiencing tighter project pipelines and increased competition.

Despite the backlog dip, contractor confidence remains above the growth threshold. ABC’s Construction Confidence Index indicates that expectations for sales, profit margins, and staffing levels are still in expansion territory, with sales outlook improving compared to a year ago. Although borrowing costs and market conditions will play a role in how 2026 unfolds, the overall sentiment suggests cautious optimism as contractors head into the spring construction season.
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