(The Center Square) − The South continues to lead the nation in construction backlog length, suggesting strong economic performance, according to new data from Associated Builders and Contractors.
“Backlog is longer in the South because contractors are busier,” ABC economist Zack Fritz told The Center Square. “This trend is downstream of the South’s economic outperformance – rapid population growth has fueled a healthy labor market and significant development activity.”
The backlog figure represents the average length of time contractors are booked in advance, and the South is leading all other regions by an average of 2.13 months in July.
ABC’s Construction Backlog Indicator for the South measured 9.8 months in July 2025, the same as in July 2024, but still significantly higher than every other region.
Still, the survey also found contractor confidence in sales and profit margins fell in July.
“Fewer than 2% of ABC members expect their profit margins to increase significantly over the next six months, the fewest since October 2024,” said Anirban Basu, a chief economist for Associated Builders and Contractors. “This is likely due to trade policy and the recent acceleration in materials price escalation; more than 80% of ABC members have been notified of tariff-related price increases.”
The backlog, according to Basu, is partly driven by infrastructure projects and a surge in data center construction, noting that “1 in every 8 ABC members is currently under contract to perform work on a data center project.”
Backlog is measured in months by averaging the ratio of contractors’ total work under contract to their prior year revenues. While some contractors report having no backlog at all, Fritz said the reading will “realistically always be positive” when averaged across the industry.
Migration trends since 2020 heavily favor the South, with Texas, Florida, North Carolina, Georgia, and South Carolina collectively gaining nearly 1.2 million new residents. Census Bureau data shows it was the only region as a whole to attract more people from other states than it lost.
Louisiana and Mississippi were the lone exceptions in the South, recording slight population declines compared with 2020.
According to ABC’s methodology, the South includes: Alabama, Arkansas, Florida, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Georgia, Tennessee, Texas and Virginia.
