Contractors’ Inner Confidence High Despite Low Construction Backlog

by David Flaherty | 12 February 2026 10:26 am

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Associated Builders and Contractors (ABC) reported that its Construction Backlog Indicator fell to 8 months in January, according to an ABC member survey
conducted January 20 to February 3. The reading is down 0.2 months from December and 0.4 months from January 2025.
Backlog continues to hold up better for larger contractors, rising over the past year for those with annual revenues above $50 million, while falling sharply for those with revenues below that threshold.
ABC’s Construction Confidence Index[2] reading for sales, profit margins, and staffing levels increased again in January. Sales expectations are better than they were one year ago, while profit margin and staffing expectations[3] are slightly worse. The readings for all three components remain above the 50 threshold, indicating expectations of growth over the next six months.
“Backlog fell to a four-year low in January, yet contractors remain shockingly sanguine about the near-term outlook,” said ABC chief economist Anirban Basu. “Just 13 percent of contractors expect their sales to decrease over the next six months, the smallest share since February 2022. Despite that personal confidence, ABC members are far less optimistic about their competitors; 46 percent of contractors expect their competitors’ sales to decline over the next two quarters. Whether or not this personal optimism is justified will likely depend on the extent to which borrowing costs can decline in 2026.”

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