Construction industry leaders were more optimistic in February, according to Associated Builders and Contractors.
Two of the three components of ABC’s Construction Confidence Index rose for the month but two of the three were down year over year.
In February, ABC’s Construction Confidence Index increased from 61.2 to 63 for staffing levels and from 64.7 to 65.8 for sales expectations. The index decreased from 53.4 to 52.9 for profit margin expectations.
Additionally, ABC’s Construction Backlog Indicator rose from 8 months in January to 8.1 months in February and was down 0.2 months compared with February 2025.
“Backlog bounced back from January’s four-year low, yet it remains subdued by historical standards,” said ABC Chief Economist Anirban Basu. “It’s notable that backlog growth has been confined to the Middle States region. After struggling in the immediate aftermath of the pandemic, the Midwest has posted surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity.
“Contractors under contract to work on data centers (11.2 months) continue to have significantly longer backlog than those who are not (7.6 months),” Basu continued. “While data center work should continue apace over the next few quarters, the conflict in Iran, which began during this middle of this month’s CBI survey period, may suppress demand for other forms of construction work due to elevated materials prices, borrowing costs and uncertainty."
Basu warned oil prices may dampen contractors’ optimism.
“While contractors remain slightly optimistic that their profit margins will expand over the next six months, that confidence may not survive the recent and precipitous increase in oil prices,” Basu said. “Rising input costs, if persistent, could weigh on hiring expectations, which were particularly upbeat in February. The CCI series for staffing level expectations rose to the highest level since March 2025.”
