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Booming Data Centers Prop Up Larger Contractors Amid Industry Divide
15 Nov
Summary
- 65% of contractors see construction activity contracting
- 23% of firms expect sales to decline in next 6 months
- Smaller firms with diverse work see backlog drop to 5.8 months
- Larger firms with data center projects report 10.9 months of backlog
As of November 15th, 2025, the construction industry is witnessing a stark divide in performance, with larger firms buoyed by booming data center projects while smaller, diversified contractors struggle with declining backlogs.
According to the latest data, nearly 65% of construction companies believe that overall activity is contracting, aligning with October's lowest backlog reading since May. Additionally, 23% of firms expect sales to decline in the next six months, the largest share in over a year.
The pullback is particularly pronounced among smaller construction companies that do not primarily operate in any one industry. These firms report a backlog of just 5.8 months, a significant drop from previous levels.
In contrast, larger contractors with work tied to multibillion-dollar megaprojects, especially in the data center sector, continue to see robust demand. Roughly one in seven contractors hold data center contracts, and these firms report an average backlog of 10.9 months, compared to just 8 months for those without such work.
"These findings are consistent with an industry that is sustained by still-elevated manufacturing construction and a surging data center sector," said Anirban Basu, the chief economist at the Associated Builders and Contractors.
