Nonresidential construction backlog expanded again in April as the rapid growth of data center development continued to reshape demand across the construction industry.
According to new data from Associated Builders and Contractors, the industry’s Construction Backlog Indicator climbed to 8.8 months, marking the highest reading in nearly a year and signaling continued resilience in project demand despite broader economic uncertainty.
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The increase reflects sustained investment in hyperscale digital infrastructure projects tied to artificial intelligence, cloud computing and high-capacity data processing. Contractors involved in data center work continue to report substantially stronger pipelines than firms focused on more traditional commercial building categories.
Industry data showed contractors with active data center projects carried average backlog levels exceeding 12 months, well above firms without exposure to the sector. The strongest gains were concentrated among companies generating more than $100 million in annual revenue, reinforcing how large-scale AI infrastructure projects are increasingly favoring bigger contractors with specialized expertise and labor capacity.
The findings highlight a growing divide within the construction market as megaproject demand accelerates in select sectors while office, retail and portions of multifamily construction remain under pressure.
For construction owners and developers, the trend underscores how digital infrastructure investment has become one of the dominant drivers of nonresidential construction activity in North America. Major technology firms continue expanding AI computing capacity, creating long-term demand for power-intensive campuses, electrical infrastructure and advanced mechanical systems.
The sector’s growth is also intensifying competition for skilled labor, particularly electricians, HVAC technicians and mission-critical construction specialists. Contractors pursuing data center work are increasingly investing in workforce expansion, prefabrication strategies and supply chain partnerships to meet aggressive delivery schedules.
At the same time, rising concentration around hyperscale infrastructure projects could create risk exposure for firms heavily dependent on a narrow segment of the market. Industry analysts continue monitoring whether current development levels can be sustained if financing conditions tighten or technology spending slows.
Despite ongoing concerns surrounding tariffs, fuel costs and material pricing, contractor sentiment remained positive in April. ABC’s Construction Confidence Index readings for sales, staffing and profit margins all indicated expectations for continued expansion over the next six months.
The backlog growth also signals that large institutional owners and technology companies are continuing to move forward with major capital programs even as portions of the broader commercial real estate market remain cautious.
For contractors outside the data center ecosystem, however, the latest figures illustrate how uneven construction demand has become. Smaller firms with limited access to hyperscale projects appear to be experiencing weaker backlog growth and increased competition across conventional building categories.
Looking ahead, industry participants will be watching whether AI-driven infrastructure investment can continue offsetting softness in other sectors through the remainder of 2026. Power availability, permitting timelines, labor shortages and utility constraints are expected to remain critical variables influencing the next phase of data center expansion.
Originally reported by Jordan . B in CRE Daily.
