➤ Key Highlights
Contractor backlog has held between 8.4–8.7 months, signaling steady but pressured capacity across nonresidential construction.
Architectural backlogs near 6 months suggest a softened design pipeline that will eventually flow into contractor availability.
Dodge Momentum Index data shows planning activity cooling, an early indicator of thinner future starts.
High backlog keeps pricing sticky and limits schedule flexibility; lower backlog improves bid competitiveness.
Backlog remains the most reliable forward-looking signal for cost pressure, labor constraints, and execution risk.
If you really want to know where bids, labor availability, and project risk are heading, track one thing:
Contractor Backlog.
How many months of work contractors already have locked in is one of the clearest early signals for cost pressure, schedule volatility, and execution risk across the CRE pipeline.
Backlog moved quietly this year, but the implications are not quiet.
What Backlog Is Telling Us Right Now
Across nonresidential construction, average backlog has hovered around 8.4–8.7 months for most of the year. That’s not collapse territory—but it’s also not the overheated 10–12 month pipelines we saw in 2022–2023.
This matters because backlog is the point where real-world labor and capacity constraints collide with CRE capital.
High backlog = contractors set the terms.
Pricing stays sticky, schedules stretch, subcontractors cherry-pick work, and developers lose leverage.Low backlog = the market rebalances.
Bids sharpen, alternates reappear, VE becomes meaningful again, and schedules stabilize.
Backlog is the pressure gauge.
Everything else is commentary.
⚠️ How Backlog Sits Inside the CRE Timeline
Construction sits in the middle of the real estate chain, so backlog connects multiple leading indicators:
1. Planning → Dodge Momentum Index
Planning cooled this fall. That tells you future starts will soften, eventually trimming contractor pipelines.
2. Design → AIA Billings Index
ABI has been under pressure, and architecture backlogs now sit near ~6 months. When architects slow, contractor backlog eventually follows.
3. Build → ABC Construction Backlog Index
This is the “real” indicator—the point where boots-on-the-ground capacity meets demand.
You read these together to produce an early read on:
Risk of cost increases
Likelihood of labor shortages
Schedule drag
Competitiveness of bid environments
Overall project execution difficulty
Most developers only track one or two of these.
That’s a mistake.
What This Means for Anyone Planning to Build in 2026
1. Costs Won’t Fall Fast
Even when demand cools, labor scarcity keeps subcontractors busy enough that pricing doesn’t collapse. Backlogs shrink slowly, not dramatically.
2. Scheduling Risk Is Still Underrated
A backlog of 8+ months means the trades you need today are already locked into commitments made last winter.
If you don’t lock your schedule, the schedule will lock you.
3. This Is a Market for Precision, Not Optimism
Developers who assume “prices will come down next quarter” usually get burned.
Developers who align procurement strategies with backlog cycles typically win.
Your Playbook: How to Use Backlog to Make Better Decisions
If Backlog Is Rising or High:
Lock critical trades early
Consider CMAR or early-GMP structures
Complete VE before design milestones, not after
Assume conservative durations—don't compress timelines to make pro formas look prettier
If Backlog Starts Falling:
Rebid or negotiate open trades
Push alternates and scope packages aggressively
Explore phased buyout to exploit pricing shifts
Strengthen your leverage: schedule flexibility is a weapon
Always:
Track ABC Backlog (nonres)
Track ABI + design backlogs
Track Dodge Momentum Index
When these three converge, you essentially get a real-time view into the next 12–18 months of CRE construction conditions.
Bottom Line
Backlog isn’t a headline metric.
It’s not dramatic.
It doesn’t trend on LinkedIn.
But it is one of the most reliable signals for:
where costs are going
how competitive the bid environment will be
whether labor will bottleneck your schedule
and how much execution risk is baked into your next project
Most CRE commentary looks backward.
Backlog looks forward.
And in this market, forward is everything.
Stop Reading Headlines
Start Understanding the Market
➤ TAKEAWAY
Backlog is the quiet but decisive indicator that shapes everything downstream—pricing, labor availability, bid competitiveness, and schedule risk. While traditional market watchers track rates or materials costs, backlog reveals where the construction environment is actually heading. With backlogs still elevated but trending softer, we’re entering a period where disciplined procurement, early trade engagement, and precise scheduling matter more than optimistic assumptions about falling costs.
