Building & Construction
October 13, 2025
Tracking construction, Part 1: Weighing the construction backlog
Written by Nicholas Bell
As if the construction industry weren’t already fragmented enough, the federal government shutdown has made it even more difficult to gauge current conditions, halting the release of official sector statistics.
In the absence of public data, the construction sector is relying on privately compiled indicators to assess market conditions.
Among some of the most valuable of these, the Associated Builders and Contractors (ABC) Construction Backlog Indicator (CBI) provides one of the few consistent snapshots of project pipelines.
However, it can be difficult to draw deeper conclusions from the headline figures alone. The index’s weighting – based on a firm’s size, industry mix, and regional exposures – plays a major role in shaping the overall reading, meaning changes in one category can mark divergences elsewhere in the dataset.
Overall, the broader CBI slipped by 0.3 months to 8.5 months of backlog in August, down from 8.8 months in July, though still higher than the 8.2 months recorded in August 2024.
When delineated by industry and company size, however, the data tells a divergent story.
CBI by industry
The “heavy industrial” backlog surged to 11.0 months, up sharply from 5.1 months in July and 7.6 months a year earlier. This marks a significant gain of nearly four months in a single reporting period.
The “infrastructure” segment followed a similar but less dramatic trajectory, rising to 11.2 months from 9.6 months in July and 9.1 months in August 2024.
On the other hand, the “commercial and institutional” category fell to 8.3 months from 9.2 months, remaining flat year over year.
If nothing else, the dip in the overall CBI, despite robust gains in industrial and infrastructure project pipelines, reinforces how heavily the index is weighted toward commercial and institutional construction.
So, even if megaprojects in manufacturing, energy, and public works expand, they still account for a relatively narrow share of the total non-residential market.
A roughly 116% month-to-month increase in heavy industrial backlog and a 16% rise in infrastructure backlog were not enough to offset a 10% decline in commercial and institutional backlog, which by weighting alone translates to roughly a 3-4% pullback in the national composite figure.
In other words, the commercial and institutional segment remains the gravitational center of U.S. construction activity and, consequently, the single largest driver of the overall index.
CBI by region
It can be implied from the regional data that a larger share of the CBI’s weighting leans toward the “South,” while the “Middle States,” the “Northeast,” and the “West” each contribute relatively similar shares to the national composite.
The South remains the dominant driver, but regional variation overall exerts the least influence on the index’s movement compared with differences by industry and company size.
The South, at 10 months, remains the strongest region and likely represents the largest contributor to the national average. Its backlog rose 0.2 months from July’s 9.8 months, reinforcing the South’s role as the primary driver of national, non-residential construction momentum.
The Midwest, steady at 8.3 months after a 0.3-month gain, and the Northeast, essentially flat at 8.0 months following a 0.1-month decline, comprise similar shares alongside the western U.S.
That said, the West fell sharply to 6.6 months from 8.7 months, a 2.1-month decline that was large enough to offset modest gains elsewhere and account for most of the 0.3-month drop in the national composite.
Taken together, the regional data suggest that while the South continues to anchor the index, and the West’s volatility can still influence month-to-month changes, regional variation overall exerts the least influence on the index’s movement compared with the much heavier weight of industry composition and company size.
CBI by company size
When viewed by company size, the weighting is even more pronounced.
Firms with annual revenues under $30 million, which account for more than half of the total backlog weighting, saw backlog fall to 7.1 months in August from 7.9 months in July, a 0.8-month decline that almost singe-handedly drove the 0.3-month drop in the national CBI.
These smaller firms are predominantly engaged in short cycle, privately financed commercial and institutional work, where tighter lending conditions and project deferrals are now more apparent.
By contrast, companies with annual revenues between $30-50 million reported a moderate increase to 9.7 months from 9.2 months sequentially, while $50-100 million firms rose to 10.1 months from 9.3 months over the same period
The largest group, contractors/builders with annual revenues exceeding $100 million, posted the highest backlog of all at 13.5 months, up from 12.3 months in July. These firms tend to be tied to industrial and infrastructure megaprojects that require longer lead times, which continue to expand even as smaller commercial pipelines soften.
Conclusion
So what does this tell us?
Beyond the fresh figures, it indicates what most construction watchers may already know: that the index’s movement is dictated by smaller firms and short-cycle commercial work even as large-scale industrial and infrastructure projects dominate headlines. For those already following the market, this update is less a revelation than a reminder of where the real weighting still lies.
The distribution by company size reinforces the structural split evident across sectors: large, well-capitalized contractors are benefiting from the surge in industrial and public-works activity, while smaller firms concentrated in commercial and institutional markets remain the most exposed to near-term slowdowns.
As with the regional breakdown, however, it is company size and industry composition, not geography, that carry the greatest weighting in the national backlog calculation figures published by the ABC.
Smaller firms, particularly those tied to commercial and institutional work, continue to anchor the index, and their August pullback outweighed the momentum among large-scale industrial contractors. Those concentrated in the South likely have a larger impact on the overall indicator. However, regional differences carry comparatively less weight in the aggregate calculation, making geography the least consequential dimension of the backlog’s overall movement.
Make sure to read Part 2, where we take the analysis further and link the backlog data with planning, design, and start-stage indicators to see how the cycle fits together.
