ABC’s backlog indicator falls to four-year low in January

The Construction Backlog Indicator from Associated Builders and Contractors (ABC) fell to eight months in January 2026, according to an ABC member survey conducted Jan. 20 through Feb. 3.

The reading is down 0.2 months from December and 0.4 months compared to January 2025. Washington-based ABC says backlog continues to hold up better for larger contractors, rising over the past year for contractors with greater than $50 million in annual revenues while falling sharply for those with revenues below that threshold. 

“Backlog fell to a four-year low in January, yet contractors remain shockingly sanguine about the near-term outlook,” ABC Chief Economist Anirban Basu says. “Just 13 percent of contractors expect their sales to decrease over the next six months, the smallest share since February 2022.”

The association’s Construction Confidence Index 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 are slightly worse. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Despite that personal confidence, ABC members are far less optimistic about their competition as 46% of contractors expect that other contractors will see their sales decline over the next two quarters,” Basu says. “Whether or not this personal optimism is justified will likely depend on the extent to which borrowing costs can decline in 2026.”