Construction Backlog Indicator Rebounds in February, Contractor Confidence Grows

Associated Builders and Contractors reported that its Construction Backlog Indicator rose to 8.1 months in February, according to an ABC member survey conducted Feb. 20 to March 6. The reading is up 0.1 months from January but down 0.2 months from February 2025.

View ABC’s Construction Backlog Indicator and Construction Confidence Index for February. View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog increased sharply during February in the Middle States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Notably, the Middle States is the only region with higher backlog than one year ago.

ABC’s Construction Confidence Index readings for sales and staffing levels increased again in February, while the reading for profit margins fell. 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.

“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),” said Basu. “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.

“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,” said Basu. “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.”

Construction Employment Falls By 11,000 In February With Declines In Residential And Nonresidential As Firms Worry About Demand Levels

Association Officials Note that Contractors Appear to Have Hit Pause on Hiring in February as Firms Seek Greater Certainty about Materials Prices, Future Federal Infrastructure Investments and Other Demand

Construction employment declined by 11,000 jobs in February, with decreases in both residential and nonresidential segments, according to an analysis of new government data released today by the Associated General Contractors of America. The decline follows stronger hiring in January than previously reported and suggests contractors are becoming more cautious about adding workers amid uncertainty about materials prices and demand for projects.

“Contractors may be more reluctant to add workers amid uncertainty about how much they will pay for construction materials and demand for certain types of construction projects,” said Macrina Wilkins, the association’s director of market insights. “But even with the monthly drop, construction employment has grown at a faster rate during the past year than the broader economy.”

Construction employment totaled 8,309,000, seasonally adjusted, in February, a loss of 11,000 from January. Over the past 12 months, the industry has added 42,000 jobs, a gain of 0.5 percent, outpacing the 0.1 percent increase in total nonfarm payroll employment.

The contraction mostly occurred in residential construction. Residential construction shed 7,100 jobs for the month, as a decline of 9,500 positions among residential specialty contractors more than offset a gain of 2,400 jobs among residential building contractors. Nonresidential construction employment slipped by 3,800 jobs in February. Within that category, employment among nonresidential building contractors increased by 4,100 positions. Nonresidential specialty trade contractors shed 1,400 jobs. Employment in heavy and civil engineering construction declined by 6,500 jobs for the month.

Average hourly earnings for production and nonsupervisory employees in construction—including most onsite craft workers and many office staff—rose to $38.52 in February, an increase of 5.1 percent over the past year.

Association officials said uncertainty—about materials prices and levels of demand for projects—likely prompted some firms to pause hiring in February. They said federal officials could help ease that uncertainty by passing a new surface transportation bill before the current law expires at the end of September. They noted that the association has launched a new national campaign, called America’s Moving Forward, to push Congress to pass a new transportation law on time.

“Congress can send a clear signal about construction demand by passing a new highway and transit bill before the current measure expires,” said Jeffrey D. Shoaf, the association’s chief executive officer. “As the single largest federal construction measure, the transportation bill is a significant driver of construction demand across the country.”

View the construction employment data.

The Key Role of Construction in Each State’s Economy

AGC has compiled data on the role of construction in the economy and employment in the United States, each state and major metro areas. Click on a state to see the fact sheet for it.

ABI February 2026: Business conditions at architecture firms may stabilize soon

After several months of softness, architecture firm billings were close to flat in February

The AIA/Deltek Architecture Billings Index® (ABI) score for the month was 49.4, meaning that the share of firms reporting that billing declined was only slightly greater than the share of firms reporting that billings increased (a score of 50 would mean that those shares were equal). In addition, inquiries increased again this month, after declining slightly in January. And while the value of newly signed design contracts continued to decline, the pace of that decline slowed significantly. All these signs suggest that business conditions at architecture firms may be stabilizing, though ongoing global economic uncertainty may make that short-lived.

Business conditions remained flat at architecture firms located in the South for the second consecutive month in February but continued to decline at firms located in other parts of the country. Billings were particularly soft at firms in the Northeast, most likely due to the recent parade of winter storms that have hit the region. Firms across all specializations continued to experience declining billings this month, but the share of firms with an institutional specialization reporting declining billings decreased, as billings at those firms approached flat.

This month, we introduced a new question that we will ask quarterly going forward. The new question asks firm leaders their sentiment about how they think their firm’s gross billings/billable work in the next quarter will compare with the current quarter. Overall, nearly half of responding firm leaders this month (48%) indicated that they expect that billings will remain about the same in the second quarter of 2026, as compared to the first quarter. However, nearly one third (31%) indicated that they expect that their billings will increase by 5% or more, while 21% expect that their billings will decrease by 5% or more. Large firms with annual billings of $5 million or more (39%), firms located in the Midwest (38%) and South (36%), and firms with a commercial/industrial specialization (36%) were most likely to anticipate an increase in their billings in the coming months. Conversely, firms with annual billings of less than $1 million (28%) and those located in the Northeast (27%) were most likely to expect their billings to decline in the second quarter.

More than one-third of firms have increased their professional liability insurance in the last three years

For this month’s special practice questions, AIA asked firm leaders about recent trends in professional liability insurance at their firm. Overall, nearly eight in 10 responding firm leaders (79%) reported that they carry firm-wide professional liability insurance, while 25% report that they carry firm-wide coverage and supplemental coverage for specific projects, and 1% report that they do not carry any coverage (multiple responses were permitted).

At firms that carry firm-wide coverage, 63% reported that their coverage has remained the same over the last three years. However, more than one-third (36%) reported that their coverage has increased in the last three years. Large firms with annual billings of $5 million or more were most likely to report that they have increased coverage (48%), followed by firms located in the South (42%), and firms with an institutional specialization (42%). Just 1% of responding firm leaders reported that firm-wide coverage has decreased in the last three years, which was most common among small firms with annual billings of less than $250,000 (5%).

At firms that carry project-specific coverage, slightly more than half of responding firm leaders (53%) reported that their coverage has remained the same in the last three years, while 30% reported that their coverage has increased. Firms located in the South (39%) and West (36%), and firms with a multifamily residential specialization (37%) were most likely to report that coverage has increased. In addition, 6% of responding firm leaders reported that their project-specific coverage has declined in the last three years, while 3% reported that their coverage has been eliminated.

Dodge Momentum Index Declines by 7% in February

The Dodge Momentum Index (DMI), issued by Dodge Construction Network declined 7.3% in February to 250.0 (2000=100) from the downwardly revised January reading of 269.8. Over the month, commercial planning fell 8.9%, and institutional planning momentum slowed by 4.0%.

“Planning momentum continued to normalize in February after a surge in activity in the back half of 2025,” said Sarah Martin, Associate Director of Forecasting at Dodge Construction Network. “Elevated risks around costs, labor, and geopolitics will continue to constrain builder confidence in the near-term but the robust planning pipeline suggests an acceleration in construction spending in 2027.”

On the commercial side, planning momentum slowed across all commercial sectors apart from warehouses. Within institutional planning, all sectors slowed down with public buildings facing the largest contraction. Despite widespread declines, project momentum for retail stores, recreational buildings, data centers and healthcare facilities remain elevated. Year-over-year, the DMI was up 18.7% when compared to February 2025. The commercial segment was up 12.3% (+4.4% when data centers are removed) and the institutional segment was up 34.0% over the same period.

A total of 23 projects valued at $100 million or more entered planning throughout February. The largest commercial projects included the $500 million CyrusOne Data Center in Whitney, Texas, the $448 million TX12 Data Center in San Antonio, Texas and Buildings 5 and 6 of the QTS DFW2 Data Center in Wilmer, Texas – each valued at $290 million. The largest institutional projects to enter planning were the $400 million Orange County Convention Center Grand Concourse expansion (Phase 5A) in Orlando, Florida, a $254 million school replacement project in Upper Marlboro, Maryland, and the $250 million Langley F-22 Dormitory Building in Mclean, Virginia.

The DMI is a monthly measure based on the three-month moving value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year to 18 months.