Construction backlogs edged higher at the end of 2025, but the gains were unevenly distributed across the industry, with large contractors capturing most of the benefits from continued data center investment.
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Construction backlog rose to 8.2 months in December, up slightly from November, according to an Associated Builders and Contractors survey conducted between Dec. 22 and Jan. 7. Despite the month-over-month increase, overall backlog levels remained 0.1 months lower than December 2024, signaling a cooling trend outside a handful of high-growth segments.
The data shows a widening divide between firms of different sizes. Contractors reporting more than $100 million in annual revenue posted their highest backlog levels since 2021, while companies with less than $30 million in revenue recorded their lowest backlogs in more than three years.
Although contractor confidence improved modestly in December, ABC noted that sentiment declined on a year-over-year basis, reflecting ongoing uncertainty for firms that are not directly tied to the data center pipeline.
The growing backlog imbalance can largely be traced to one dominant force reshaping nonresidential construction: the surge in data center development fueled by artificial intelligence and cloud computing demand.
“Backlog fell sharply for smaller contractors during 2025,” said Anirban Basu, ABC chief economist, in the report. “That decline was largely due to the fact that nonresidential construction momentum is confined to the data center segment, and those projects are far more beneficial for the largest contractors.”
Industry economists expect that gap to widen further in 2026 as hyperscalers continue to roll out large, capital-intensive projects that favor firms with the scale, balance sheets and technical expertise required to deliver them.
Contractors already active in the data center market anticipate elevated activity levels over the next year. Low vacancy rates across the sector suggest a sustained pipeline of new projects, said James Bohnaker, senior economist at Cushman & Wakefield, pointing to continued momentum for billion-dollar campuses tied to AI workloads.
However, contractors operating outside the data center space are experiencing the opposite effect, with shrinking backlogs and limited access to the fastest-growing segment of the market.
In December, 13% of ABC members reported working on at least one data center project, and those firms carried approximately 11 months of backlog, compared with 7.8 months for contractors without data center work, according to Basu.
That disparity continues to weigh on industry-wide confidence. While sentiment improved slightly at the end of the year, overall confidence levels still “remain well below late-2024 and early-2025 levels,” Basu said, underscoring how narrowly concentrated today’s construction growth has become.
Originally reported by Sebastian Obando, Reporter in Construction Dive.
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